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$12,705,000MARYLAND ECONOMIC DEVELOPMENT CORPORATION

STUDENT HOUSING REFUNDING REVENUE BONDS(SALISBURY UNIVERSITY PROJECT)

SERIES 2013

NEW ISSUE-BOOK ENTRY ONLY

Dated: Date of Delivery

Dated: May 1, 2013

In the opinion of Bond Counsel, interest on the Series 2013 Bonds is excludable from gross income for purposes of federal income tax, assuming continuing compliance with the requirements of the federal tax laws. Interest on the Series 2013 Bonds is not a preference item for purposes of either individual or corporate federal alternative minimum tax; however, interest paid to corporate holders of the Series 2013 Bonds may be indirectly subject to alternative minimum tax under circumstances described under “TAX EXEMPTION” herein. By the terms of the Act (as defined herein), the Series 2013 Bonds, including the interest on the Series 2013 Bonds, are forever exempt from all Maryland state and local taxes. See “TAX EXEMPTION” herein.

The Series 2013 Bonds will be issued in fully registered form, registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”), which will act as securities depository for the Series 2013 Bonds. Individual purchases of beneficial ownership interests in the Series 2013 Bonds will be made in book-entry form only, and individual purchasers will not receive physical delivery of bond certificates. Payments of the principal of and interest on the Series 2013 Bonds will be made by Manufacturers and Traders Trust Company, as Trustee, to Cede & Co., as nominee for DTC, for disbursement to DTC participants and subsequent disbursement to the beneficial owners of the Series 2013 Bonds. The Series 2013 Bonds are issuable as fully registered bonds without coupons in denominations of $5,000 or any multiple thereof. The Series 2013 Bonds will bear interest from the date of delivery, payable on December 1, 2013 and semiannually thereafter on each June 1 and December 1.

The Series 2013 Bonds are being issued by Maryland Economic Development Corporation (the “Issuer”) to (i) currently refund the outstanding Issuer’s Maryland Economic Development Corporation Student Housing Revenue Bonds (Salisbury University Project) Series 2003 (the “Series 2003 Bonds”), originally issued in the principal amount of $16,410,000, and (ii) pay the costs associated with issuing the Series 2013 Bonds.

THE SERIES 2013 BONDS AND INTEREST THEREON AND THE REDEMPTION PRICE THEREOF ARE LIMITED OBLIGATIONS OF THE ISSUER, THE PRINCIPAL AND REDEMPTION PRICE OF AND INTEREST ON WHICH ARE PAYABLE SOLELY FROM THE TRUST ESTATE (DEFINED HEREIN). NEITHER THE SERIES 2013 BONDS NOR THE INTEREST THEREON NOR THE REDEMPTION PRICE THEREOF IS A DEBT, LIABILITY OR A PLEDGE OF THE FULL FAITH AND CREDIT OF THE STATE OF MARYLAND, ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER. THE ISSUANCE OF THE SERIES 2013 BONDS IS NOT DIRECTLY, INDIRECTLY, OR CONTINGENTLY A MORAL OR OTHER OBLIGATION OF THE STATE OF MARYLAND, ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER, TO LEVY OR PLEDGE ANY TAX OR TO MAKE ANY APPROPRIATION TO PAY THE SERIES 2013 BONDS. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF MARYLAND, ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, INTEREST ON OR THE REDEMPTION PRICE OF THE SERIES 2013 BONDS. THE ISSUER HAS NO TAXING POWER.

MATURITY SCHEDULE$4,610,000 Serial Bonds

The Series 2013 Bonds are subject to optional, mandatory, and extraordinary redemption as described herein.

AN INVESTMENT IN THE SERIES 2013 BONDS INVOLVES A HIGH DEGREE OF RISK AND IS SPECULATIVE IN NATURE. SEE “CERTAIN BONDHOLDERS’ RISKS” HEREIN FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SERIES 2013 BONDS. EACH INVESTOR SHOULD CONSIDER THE RISKS INVOLVED TO DETERMINE THE SUITABILITY OF INVESTING IN THE SERIES 2013 BONDS. This cover page is for quick reference only. It is not a summary of this Official Statement. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision.

The Series 2013 Bonds are offered when, as, and if issued by the Issuer and received by the Underwriter and are subject to prior sale, withdrawal, modification or cancellation of the offer without notice and the approval of legality by Ballard Spahr LLP, Baltimore, Maryland, Bond Counsel, and to certain other conditions. Certain legal matters will be passed upon for the Underwriter by Miles & Stockbridge P.C. Delivery of the Series 2013 Bonds through the facilities of DTC is expected on or about June 3, 2013.

Rating: Moody’s: Baa3(See “RATING” herein)

Due: June 1, as shown below

NEW ISSUE-BOOK ENTRY ONLY Rating: Moody’s: Baa3 (See “RATING” herein)

In the opinion of Bond Counsel, interest on the Series 2013 Bonds is excludable from gross income for purposes of federal income tax, assuming continuing compliance with the requirements of the federal tax laws. Interest on the Series 2013 Bonds is not a preference item for purposes of either individual or corporate federal alternative minimum tax; however, interest paid to corporate holders of the Series 2013 Bonds may be indirectly subject to alternative minimum tax under circumstances described under “TAX EXEMPTION” herein. By the terms of the Act (as defined herein), the Series 2013 Bonds, including the interest on the Series 2013 Bonds, are forever exempt from all Maryland state and local taxes. See “TAX EXEMPTION” herein.

$12,705,000 MARYLAND ECONOMIC DEVELOPMENT CORPORATION

STUDENT HOUSING REFUNDING REVENUE BONDS(SALISBURY UNIVERSITY PROJECT)

SERIES 2013Dated: Date of Delivery Due: June 1, as shown below

The Series 2013 Bonds will be issued in fully registered form, registered in the name of Cede & Co., as nominee for The Depository Trust Company, New York, New York (“DTC”), which will act as securities depository for the Series 2013 Bonds. Individual purchases of beneficial ownership interests in the Series 2013 Bonds will be made in book-entry form only, and individual purchasers will not receive physical delivery of bond certificates. Payments of the principal of and interest on the Series 2013 Bonds will be made by Manufacturers and Traders Trust Company, as Trustee, to Cede & Co., as nominee for DTC, for disbursement to DTC participants and subsequent disbursement to the beneficial owners of the Series 2013 Bonds. The Series 2013 Bonds are issuable as fully registered bonds without coupons in denominations of $5,000 or any multiple thereof. The Series 2013 Bonds will bear interest from the date of delivery, payable on December 1, 2013 and semiannually thereafter on each June 1 and December 1.

The Series 2013 Bonds are being issued by Maryland Economic Development Corporation (the “Issuer”) to (i) currently refund the outstanding Issuer’s Maryland Economic Development Corporation Student Housing Revenue Bonds (Salisbury University Project) Series 2003 (the “Series 2003 Bonds”), originally issued in the principal amount of $16,410,000, and (ii) pay the costs associated with issuing the Series 2013 Bonds.

THE SERIES 2013 BONDS AND INTEREST THEREON AND THE REDEMPTION PRICE THEREOF ARE LIMITED OBLIGATIONS OF THE ISSUER, THE PRINCIPAL AND REDEMPTION PRICE OF AND INTEREST ON WHICH ARE PAYABLE SOLELY FROM THE TRUST ESTATE (DEFINED HEREIN). NEITHER THE SERIES 2013 BONDS NOR THE INTEREST THEREON NOR THE REDEMPTION PRICE THEREOF IS A DEBT, LIABILITY OR A PLEDGE OF THE FULL FAITH AND CREDIT OF THE STATE OF MARYLAND, ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER. THE ISSUANCE OF THE SERIES 2013 BONDS IS NOT DIRECTLY, INDIRECTLY, OR CONTINGENTLY A MORAL OR OTHER OBLIGATION OF THE STATE OF MARYLAND, ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER, TO LEVY OR PLEDGE ANY TAX OR TO MAKE ANY APPROPRIATION TO PAY THE SERIES 2013 BONDS. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF MARYLAND, ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, INTEREST ON OR THE REDEMPTION PRICE OF THE SERIES 2013 BONDS. THE ISSUER HAS NO TAXING POWER.

______________________________________________________________________________________________________ MATURITY SCHEDULE

$4,610,000 Serial Bonds Maturity June 1

PrincipalAmount

Interest Rate Yield

CUSIP Number

Maturity June 1

PrincipalAmount

Interest Rate Yield

CUSIP Number

2014 $395,000 3.000% 1.230% 57420VLD3 2019 $465,000 4.000% 2.500% 57420VLJ0 2015 400,000 3.000 1.460 57420VLE1 2020 485,000 5.000 2.760 57420VLK7 2016 415,000 3.000 1.740 57420VLF8 2021 505,000 4.000 2.970 57420VLL5 2017 425,000 4.000 1.930 57420VLG6 2022 525,000 5.000 3.140 57420VLM3 2018 440,000 5.000 2.210 57420VLH4 2023 555,000 4.000 3.310 57420VLN1

CUSIP Number

$2,485,000 5.000% Term Bonds due June 1, 2027, Yield 3.640% Price 111.309* 57420VLP6 $5,610,000 5.000% Term Bonds due June 1, 2034, Yield 3.930% Price 108.773* 57420VLQ4

____________________________________________ *Priced at the stated yield to the first optional redemption date of June 1, 2023

_______________________________________________________________________________________________________ The Series 2013 Bonds are subject to optional, mandatory, and extraordinary redemption as described herein. AN INVESTMENT IN THE SERIES 2013 BONDS INVOLVES A HIGH DEGREE OF RISK AND IS SPECULATIVE IN NATURE. SEE

“CERTAIN BONDHOLDERS’ RISKS” HEREIN FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SERIES 2013 BONDS. EACH INVESTOR SHOULD CONSIDER THE RISKS INVOLVED TO DETERMINE THE SUITABILITY OF INVESTING IN THE SERIES 2013 BONDS.

This cover page is for quick reference only. It is not a summary of this Official Statement. Investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision.

The Series 2013 Bonds are offered when, as, and if issued by the Issuer and received by the Underwriter and are subject to prior sale, withdrawal, modification or cancellation of the offer without notice and the approval of legality by Ballard Spahr LLP, Baltimore, Maryland, Bond Counsel, and to certain other conditions. Certain legal matters will be passed upon for the Underwriter by Miles & Stockbridge P.C. Delivery of the Series 2013 Bonds through the facilities of DTC is expected on or about June 3, 2013.

RBC Capital Markets [Logo] Dated: May 1, 2013

No dealer, broker, salesman, or other person has been authorized to give any information or to make any representations other than those contained in this Official Statement, and, if given or made, such other information or representations should not be relied upon as having been authorized by the Issuer or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Series 2013 Bonds by any person in any state in which it is unlawful for such person to make such offer, solicitation, or sale.

The order and placement of materials in this Official Statement, including the Appendices hereto, are not to be deemed a determination of relevance, materiality or importance, and this Official Statement, including the Appendices hereto, must be considered in its entirety.

The information set forth herein has been obtained from the Issuer or other sources that are deemed to be reliable, but is not guaranteed as to accuracy or completeness by, and is not to be construed as a representation of, the Underwriter. The information herein is subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create an implication that there has been no change in the affairs of the Issuer since the date hereof. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

CUSIP numbers on the cover of this Official Statement are copyrighted by the American Bankers Association. CUSIP data herein is provided by Standard & Poor’s, CUSIP Service Bureau, a division of The McGraw-Hill Companies, Inc. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Service Bureau.

All quotations from and summaries and explanations of provisions of laws and documents herein do not purport to be complete and reference is made to such laws and documents for full and complete statements of their provisions. Any statements made in this Official Statement involving estimates or matters of opinion, whether or not expressly so stated, are intended merely as estimates or opinions and not as representations of fact. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale of the Series 2013 Bonds shall under any circumstances create any implication that there has been no change in the affairs of the Issuer since the date hereof.

THE SERIES 2013 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR HAS THE INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE SERIES 2013 BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF SECURITIES LAWS OF THE STATES IN WHICH THE SERIES 2013 BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN THE OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. NEITHER THESE STATES NOR ANY OF THEIR AGENCIES HAVE PASSED UPON THE MERITS OF THE SERIES 2013 BONDS OR THE ACCURACY OR COMPLETENESS OF THIS OFFICIAL STATEMENT.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES 2013 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

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TABLE OF CONTENTS

INTRODUCTORY STATEMENT ............................................................................................................................... 1 ESTIMATED SOURCES AND USES OF FUNDS ..................................................................................................... 3 THE SERIES 2013 BONDS .......................................................................................................................................... 3 SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS ...................................................... 8 THE GROUND LEASE .............................................................................................................................................. 15 THE ISSUER ............................................................................................................................................................... 20 THE PROJECTS ......................................................................................................................................................... 22 THE MANAGER AND MANAGEMENT AGREEMENT ....................................................................................... 23 THE UNIVERSITY .................................................................................................................................................... 25 NEITHER THE GROUND LESSOR NOR THE STATE NOR THE SYSTEM NOR THE UNIVERSITY

IS LIABLE FOR THE BONDS ........................................................................................................................... 27 HISTORICAL OCCUPANCY AND COVERAGE RATIOS .................................................................................... 28 CASH FLOW FORECAST ......................................................................................................................................... 28 FORWARD LOOKING STATEMENTS ................................................................................................................... 30 CERTAIN BONDHOLDERS’ RISKS ........................................................................................................................ 30 LITIGATION .............................................................................................................................................................. 37 TAX EXEMPTION ..................................................................................................................................................... 37 UNDERWRITING ...................................................................................................................................................... 38 RATING ...................................................................................................................................................................... 38 INDEPENDENT ACCOUNTANTS ........................................................................................................................... 38 INTERIM FINANCIAL STATEMENTS ................................................................................................................... 39 FINANCIAL ADVISORS ........................................................................................................................................... 39 RELATIONSHIP OF PARTIES ................................................................................................................................. 39 LEGAL MATTERS .................................................................................................................................................... 39 CONTINUING DISCLOSURE ................................................................................................................................... 39 MISCELLANEOUS .................................................................................................................................................... 40

APPENDICES

APPENDIX A-1 - ANNUAL AUDITED FINANCIAL STATEMENTS OF THE PHASE I PROJECT FOR THE FISCAL YEARS ENDED JUNE 30, 2011 AND JUNE 30, 2010 ........................... A-1

APPENDIX A-2 - AUDITED FINANCIAL STATEMENTS OF THE PHASE I PROJECT FOR THE TEN-MONTH PERIOD ENDED APRIL 30, 2012 .................................................................. A-2

APPENDIX A-3 - AUDITED STATEMENT OF REVENUES AND EXPENSES OF THE PHASE I PROJECT FOR THE FISCAL YEAR ENDED JUNE 30, 2012 .............................................. A-3

APPENDIX A-4 - ANNUAL AUDITED FINANCIAL STATEMENTS OF THE PHASE II PROJECT FOR THE FISCAL YEARS ENDED JUNE 30, 2012 AND

JUNE 30, 2011 .......................................................................................................................... A-4

APPENDIX A-5 - UNAUDITED INTERIM FINANCIAL STATEMENTS OF THE PROJECTS FOR THE NINE-MONTH PERIOD ENDED MARCH 31, 2013 ............................................ A-5

APPENDIX B - DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS ............................................................................................................ B-1

APPENDIX C - PROPOSED FORM OF BOND COUNSEL OPINION ........................................................... C-1

APPENDIX D - PROPOSED FORM OF CONTINUING DISCLOSURE AGREEMENT ............................... D-1

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OFFICIAL STATEMENT

$12,705,000 MARYLAND ECONOMIC DEVELOPMENT CORPORATION

STUDENT HOUSING REFUNDING REVENUE BONDS (SALISBURY UNIVERSITY PROJECT)

SERIES 2013

INTRODUCTORY STATEMENT

This Official Statement, including the cover page and the Appendices hereto, is provided to furnish certain information in connection with the sale by Maryland Economic Development Corporation (the “Issuer”) of its $12,705,000 Student Housing Refunding Revenue Bonds (Salisbury University Project) Series 2013 (the “Series 2013 Bonds”), to be issued by the Issuer pursuant to a Trust Indenture dated as of June 1, 2003 between the Issuer and Manufacturers and Traders Trust Company, as Trustee (the “Trustee”), as amended and supplemented by a First Supplemental Trust Indenture dated as of July 1, 2012 and a Second Supplemental Trust Indenture dated as of June 1, 2013, each between the Issuer and the Trustee (as the same may be further supplemented and amended, the “Indenture”). The Series 2013 Bonds are being issued to (i) currently refund the Issuer’s Maryland Economic Development Corporation Student Housing Revenue Bonds (Salisbury University Project) Series 2003 (the “Series 2003 Bonds”) originally issued in the principal amount of $16,410,000 and (ii) pay the costs associated with issuing the Series 2013 Bonds.

Definitions of certain terms used in this Official Statement are set forth in Appendix B hereto.

The proceeds of the Series 2003 Bonds were used to (i) pay the costs of the acquisition, construction, furnishing and equipping of a 312-bed student housing facility and recreational amenities known as “University Park Apartments – Phase II” on land owned by the State of Maryland (the “State”) for the use of the University System of Maryland (the “System”) on behalf of its constituent institution, Salisbury University (the “University”) (collectively, the “Ground Lessor”), adjacent to the east campus (recreational core) of the University in the City of Salisbury, Wicomico County, Maryland and leased to the Issuer, (ii) pay the costs of the acquisition and construction of 430 parking spaces, of which 100 are utilized by the occupants of the Phase I Project (defined below), (iii) pay the costs of acquisition, construction, furnishing and equipping of certain off-site ancillary facilities (collectively, the “Phase II Project”), (iv) pay interest accrued on the Series 2003 Bonds through initial operation of the Phase II Project, (v) establish a debt service reserve fund for the Series 2003 Bonds, (vi) pay working capital and marketing costs associated with the opening of the Phase II Project and (vii) pay the costs associated with issuing the Series 2003 Bonds. The Series 2013 Bonds will constitute Additional Bonds under the Indenture and will be secured equally and ratably on parity with the outstanding Series 2012 Bonds (defined below) and any other Additional Bonds issued under the Indenture.

Pursuant to the Indenture, the Issuer previously issued its $14,170,000 Student Housing Revenue Bonds (Salisbury University Project) Series 2012 to purchase the leasehold estate that includes the 578-bed student housing facility known as “University Park Apartments – Phase I” (the “Phase I Project”). The land on which the Phase I Project and the Phase II Project (collectively, the “Projects”) are located (the “Land”) is leased by the Ground Lessor to the Issuer pursuant to a Consolidated, Amended and Restated Ground Lease and Agreement by and between the Ground Lessor and the Issuer, as lessee thereunder, as amended by a First Amendment to Consolidated, Amended and Restated Ground Lease and Agreement by and between the Ground Lessor and the Issuer (as the same may be further supplemented or amended, the “Ground Lease”). The Ground Lease will expire on June 24, 2043 and will have a maximum remaining term of approximately 30 years upon the issuance of the Series 2013 Bonds, unless it is extended or expires or terminates in accordance with its terms or by operation of law. See “THE

GROUND LEASE” herein. The Projects are managed by EDR Management Inc. (formerly known as Allen & O’Hara Education Services, LLC) (the “Manager”) pursuant to the Consolidated, Amended and Restated Management Agreement between the Issuer and the Manager (the “Management Agreement”). See “THE MANAGER AND MANAGEMENT AGREEMENT” herein.

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The Issuer will be obligated under the Indenture and the Bonds to pay (solely from the Trust Estate) when due the principal or Redemption Price of and interest on the Bonds, and under the Indenture it is the obligation of the Issuer to pay (solely out of the Revenues) all expenses of operating and maintaining the Projects in good repair, to keep them properly insured (solely out of the Revenues), and to pay (solely out of the Revenues) all taxes, assessments, and other charges levied or assessed against or with respect to the Projects.

The obligations of the Issuer under the Indenture and the Bonds will be secured by the Indenture and by a Consolidated, Amended and Restated Leasehold Deed of Trust dated as of July 1, 2012, as amended and supplemented by a First Supplemental Consolidated, Amended and Restated Leasehold Deed of Trust dated as of June 1, 2013 (as amended, the “Deed of Trust”). See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS – Indenture” and – Deed of Trust” herein.

Neither the State nor the System nor the Ground Lessor nor the University is responsible for the payment of the principal or Redemption Price of or interest on the Series 2013 Bonds.

This Official Statement and the Appendices hereto contain brief descriptions of, among other matters, the Issuer, the Projects, the Manager, the Series 2013 Bonds, the Indenture, the Ground Lease, the Deed of Trust and the Management Agreement. Such descriptions do not purport to be comprehensive or definitive. All references herein to the Indenture, the Ground Lease, the Deed of Trust and the Management Agreement are qualified in their entirety by reference to such documents, and references herein to the Series 2013 Bonds are qualified in their entirety to the forms thereof included in the Indenture.

THE SERIES 2013 BONDS AND INTEREST THEREON AND THE REDEMPTION PRICE THEREOF ARE LIMITED OBLIGATIONS OF THE ISSUER, THE PRINCIPAL AND REDEMPTION PRICE OF AND INTEREST ON WHICH ARE PAYABLE SOLELY FROM THE TRUST ESTATE. NEITHER THE SERIES 2013 BONDS NOR THE INTEREST THEREON NOR THE REDEMPTION PRICE THEREOF IS A DEBT, LIABILITY OR A PLEDGE OF THE FULL FAITH AND CREDIT OF THE STATE OF MARYLAND, ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER. THE ISSUANCE OF THE SERIES 2013 BONDS IS NOT DIRECTLY, INDIRECTLY, OR CONTINGENTLY A MORAL OR OTHER OBLIGATION OF THE STATE OF MARYLAND, ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER, TO LEVY OR PLEDGE ANY TAX OR TO MAKE ANY APPROPRIATION TO PAY THE SERIES 2013 BONDS. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF MARYLAND, ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, INTEREST ON OR THE REDEMPTION PRICE OF THE SERIES 2013 BONDS. THE ISSUER HAS NO TAXING POWER.

SEE “CERTAIN BONDHOLDERS’ RISKS” HEREIN FOR A DISCUSSION OF CERTAIN RISK FACTORS THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE SERIES 2013 BONDS. EACH INVESTOR SHOULD CONSIDER THE RISKS INVOLVED TO DETERMINE THE SUITABILITY OF INVESTING IN THE SERIES 2013 BONDS.

Certain financial statements of the Projects are included in Appendices A-1 through A-5 hereto. Definitions of certain terms relating to the Series 2013 Bonds and summaries of certain documents relating to the Series 2013 Bonds are set forth in Appendix B attached hereto. The proposed form of opinion of Bond Counsel is attached hereto as Appendix C. The proposed form of Continuing Disclosure Agreement is attached hereto as Appendix D.

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ESTIMATED SOURCES AND USES OF FUNDS

The schedule below contains the estimated sources and uses of funds resulting from the sale of the Series 2013 Bonds (exclusive of investment earnings):

SOURCES OF FUNDS

Par Amount of Series 2013 Bonds $12,705,000.00 Original Issue Premium 1,151,145.60 Certain Amounts on Deposit in Indenture Funds 1,071,500.00 Total Sources of Funds $14,927,645.60

USES OF FUNDS

Deposit to Redemption Fund (1) $13,623,750.21 Deposit to Debt Service Reserve Fund (2) 989,250.00 Issuance Costs (3) 314,645.39 Total Uses of Funds $14,927,645.60

___________________________________ (1) Moneys on deposit in the Redemption Fund will be used to pay the Redemption Price of the Outstanding Series 2003 Bonds and accrued

interest thereon on the 2013 Closing Date. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS – Redemption Fund” herein.

(2) This amount constitutes transferred proceeds of the Series 2003 Bonds and equals the amount required to be paid to the Debt Service Reserve Fund to make the deposit therein equal to the Debt Service Reserve Fund Requirement upon the issuance of the Series 2013 Bonds. The Debt Service Reserve Fund secures both the Series 2012 Bonds and the Series 2013 Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS – Debt Service Reserve Fund” herein.

(3) Includes an Underwriter’s Discount.

THE SERIES 2013 BONDS

General Description

The Series 2013 Bonds will be dated the date of delivery and mature on June 1 in the respective years and principal amounts, all as set forth on the cover page of this Official Statement. The Series 2013 Bonds shall bear interest from their dated date, until paid, at the rate or rates set forth on the cover page of this Official Statement, payable on December 1, 2013 and semiannually thereafter on June 1 and December 1 of each year (the “Interest Payment Dates”) while the Series 2013 Bonds are outstanding.

The Series 2013 Bonds are issuable as fully registered bonds without coupons in denominations of $5,000 or any integral multiple thereof. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months. All interest on the Series 2013 Bonds will be payable to each registered owner thereof as shown on the registration books maintained by the Trustee, as of the close of business on the 15th day of the month immediately preceding the interest payment date upon which such interest is due and payable and will be made by check mailed to the address of such owner as it appears on the bond registration books maintained by the Trustee; provided however that interest payments due any holder of $1,000,000 or more in aggregate principal amount of the Series 2013 Bonds will be made by a wire transfer of immediately available funds to an account designated by such holder in a written notice to the Trustee at least 10 days prior to the first interest payment date as to which payment by wire transfer is to be made. The principal or Redemption Price of the Series 2013 Bonds will be payable upon presentation and surrender of the Series 2013 Bonds when due at the office of the Trustee in Buffalo, New York.

Certificates representing ownership in the Series 2013 Bonds will not be issued to the purchasers of the Series 2013 Bonds. Rather, The Depository Trust Company, New York, New York (“DTC”) will act as securities depository under a book-entry-only system for the Series 2013 Bonds. Unless such system is discontinued, the provisions described under “Book-Entry-Only System for Series 2013 Bonds” below (including provisions regarding payments to and transfers by the owners of beneficial interests in the Series 2013 Bonds) will be

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applicable to the Series 2013 Bonds. If such system is discontinued, the provisions described under “Book-Entry-Only System for Series 2013 Bonds” below will not be applicable.

Redemption

In the manner and with the effect provided in the Indenture, the Series 2013 Bonds will be subject to redemption prior to their respective maturities as follows.

Optional Redemption

The Series 2013 Bonds maturing on or after June 1, 2024 are subject to redemption in whole or in part at any time prior to maturity from and including June 1, 2023 at the option of the Issuer at a Redemption Price equal to the principal amount thereof, plus accrued interest thereon to the date set for redemption.

Mandatory Sinking Fund Redemption

The Series 2013 Bonds are subject to redemption prior to maturity at a Redemption Price equal to the principal amount thereof plus accrued interest thereon to the date set for redemption from Sinking Fund Installments paid from the Principal Account on June 1 of the following years in the following amounts:

Series 2013 Bonds Maturing June 1, 2027

June 1 Year

Sinking Fund Installment

2024 $575,000 2025 605,000 2026 635,000 2027* 670,000

____________ *Maturity

Series 2013 Bonds Maturing June 1, 2034

June 1 Year

Sinking FundInstallment

June 1 Year

Sinking Fund Installment

2028 $700,000 2032 $855,000 2029 740,000 2033 895,000 2030 770,000 2034* 840,000 2031 810,000

____________ *Final Maturity

Extraordinary Redemption

The Series 2013 Bonds are subject to redemption in whole or in part at any time prior to maturity at a Redemption Price equal to the principal amount thereof plus accrued interest thereon to the date set for redemption from funds deposited in the Redemption Fund from (i) proceeds from title insurance with respect to the Property, (ii) proceeds from the condemnation of the Property or any portion thereof or from agreements with, or action by, a public authority in the nature of or in lieu of condemnation proceedings and related payments, and (iii) proceeds from insurance and related payments received in connection with the loss, damage or destruction of the Property, in each case to the extent such proceeds are not used for the repair or replacement of lost, damaged, destroyed or taken property. See “DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF PRINCIPAL LEGAL

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DOCUMENTS – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Application of Proceeds of Condemnation and Insurance; Extraordinary Redemption of Bonds” in Appendix B hereto.

Selection of Series 2013 Bonds to be Redeemed

If fewer than all of the Series 2013 Bonds are called for redemption, the particular maturities of the Series 2013 Bonds to be redeemed shall be selected by the Issuer. If fewer than all of the Series 2013 Bonds of any one maturity are called for redemption, the Trustee shall select the particular Series 2013 Bonds or portions thereof to be redeemed from such maturity by lot or in such other manner as the Trustee in its discretion may deem proper; provided, however, that the portion of any Series 2013 Bond to be redeemed shall be in an Authorized Denomination and in selecting Series 2013 Bonds for redemption, each Series 2013 Bond shall be treated as representing that number of Series 2013 Bonds that is obtained by dividing the principal amount of such Bond by the smallest Authorized Denomination.

Notice of Redemption

The Trustee shall give notice by first-class mail of the call for any redemption of the Series 2013 Bonds at least 30 days before the redemption date to the registered owners of the Series 2013 Bonds to be redeemed; provided however, that so long as the Series 2013 Bonds are maintained in Book-Entry Form, notice of the call for redemption required to be given to the registered owners shall be given only to the Depository or its nominee in whose name the Series 2013 Bonds are registered. The failure to mail any such notice to any Owner of Series 2013 Bonds to be redeemed, or any defect therein, shall not affect the validity of the proceedings for the redemption of any other Series 2013 Bonds. If for any reason it is impossible or impractical to mail such notice of redemption, the Trustee shall give notice of the call for any redemption by publication at least once in an Authorized New York Newspaper and at least once in an Authorized Baltimore Newspaper, which notice shall be published at least 30 days before the redemption date. Any such notice of the call for redemption (other than any notice of mandatory sinking fund redemption) may be conditioned on receipt by the Trustee of sufficient funds to pay the Redemption Price of the Series 2013 Bonds to be redeemed and the interest accrued thereon prior to the redemption date. The Series 2013 Bonds or portions thereof so called for redemption shall become due and payable at the Redemption Price provided for such Series 2013 Bonds or such portions thereof on such date plus accrued interest to such date and, if moneys for the payment of the Redemption Price and accrued interest are held by the Trustee as provided in the Indenture, interest on such Series 2013 Bonds or such portions thereof so called for redemption shall cease to accrue, such Series 2013 Bonds or such portions thereof so called for redemption shall cease to be entitled to any benefit or security under the Indenture, and the registered owners thereof shall have no rights in respect of such Series 2013 Bonds or such portions thereof so called for redemption except to receive payment of the Redemption Price thereof and the accrued interest thereon so held by the Trustee.

Transfer and Exchange of Series 2013 Bonds

Any Series 2013 Bond may be exchanged for an equal aggregate principal amount of Series 2013 Bonds of the same maturity and bearing interest at the same rate and of other Authorized Denominations, and the transfer of any Series 2013 Bond may be registered, upon presentation and surrender of such Bond at the corporate trust office of the Trustee in Buffalo, New York, together with an assignment duly executed by the Owner or the Owner’s attorney or legal representative. The Issuer and the Trustee may require the person requesting any such exchange or transfer to reimburse them for any tax or other governmental charge, shipping charges and insurance payable in connection therewith. Neither the Issuer nor the Trustee nor the Registrar shall be required to register the transfer of or make any such exchange of any Series 2013 Bond after such Series 2013 Bond or any portion thereof has been selected for redemption.

Acceleration of Maturity

Upon the occurrence of certain events, the due date for the payment of the principal amount of the Series 2013 Bonds may be accelerated. See “DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Events of Default and Remedies” in Appendix B hereto.

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Book-Entry-Only System for Series 2013 Bonds

The information provided under this caption, “THE SERIES 2013 BONDS - Book-Entry Only System,” has been provided by The Depository Trust Company, New York, New York (“DTC”). No representation is made by the Issuer, the Trustee or the Underwriter as to the accuracy or adequacy of such information provided by DTC or as to the absence of material adverse changes in such information subsequent to the date hereof.

DTC will act as securities depository for the Series 2013 Bonds. The Series 2013 Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered bond certificate will be issued for each maturity of the Series 2013 Bonds set forth on the cover page of this Official Statement, each in the aggregate principal amount of such maturity, and all certificates will be deposited with DTC or pursuant to its instructions.

DTC, the world’s largest depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). The Rules applicable to DTC and its Direct and Indirect Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com and www.dtc.org.

Purchases of Series 2013 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Series 2013 Bonds on DTC’s records. The ownership interest of each actual owner of a Series 2013 Bond (a “Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of beneficial ownership interests in the Series 2013 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the Series 2013 Bonds, except in the event that use of the book-entry only system for the Series 2013 Bonds is discontinued.

To facilitate subsequent transfers, all Series 2013 Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC). The deposit of the Series 2013 Bonds with DTC and their registration in the name of Cede & Co. (or such other nominee as requested by an authorized representative of DTC) effect no change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Series 2013 Bonds. DTC’s records reflect only the identity of the Direct Participants to whose accounts such Series 2013 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Series 2013 Bonds may wish to take certain steps to augment transmission to them of notices

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of significant events with respect to the Series 2013 Bonds, such as redemptions, tenders, defaults and proposed amendments to the Indenture and the Deed of Trust. For example, Beneficial Owners of the Series 2013 Bonds may wish to ascertain that the nominee holding the Series 2013 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If fewer than all of the Series 2013 Bonds of a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Series 2013 Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the Series 2013 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Payment of principal and Redemption Price of and interest on the Series 2013 Bonds will be made to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC). DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Issuer or the Trustee on each payable date in accordance with their respective holdings shown on DTC’s records. Payments by Direct and Indirect Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participants and not of DTC (or its nominee), the Trustee or the Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal and Redemption Price and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Trustee. Disbursement of such payments to Direct Participants will be the responsibility of DTC and disbursement of such payments to the Beneficial Owners will be the responsibility of the Direct Participants and Indirect Participants.

IT IS THE DUTY OF EACH BENEFICIAL OWNER TO MAKE ARRANGEMENTS WITH THE APPLICABLE DIRECT PARTICIPANT OR INDIRECT PARTICIPANT TO RECEIVE FROM SUCH PARTICIPANT NOTICES OF PAYMENTS OF PRINCIPAL, REDEMPTION PRICE AND INTEREST, AND ALL OTHER PAYMENTS AND COMMUNICATIONS WHICH THE DIRECT PARTICIPANT RECEIVES FROM DTC. NEITHER THE ISSUER NOR THE TRUSTEE HAS ANY DIRECT OBLIGATION OR RESPONSIBILITY TO DIRECT PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS.

For every transfer and exchange of ownership interests in the Series 2013 Bonds, the Beneficial Owners may be charged a sum sufficient to cover any tax, fee or other governmental charge that may be imposed in relation thereto.

DTC may discontinue providing its services as securities depository with respect to the Series 2013 Bonds at any time by giving reasonable notice to the Issuer or the Trustee. In addition, the Issuer may, and at the request of the Underwriter shall, decide to discontinue the use of DTC or any successor as securities depository for the Series 2013 Bonds under certain circumstances; any book-entry system will also be discontinued at the written request of 100% of the beneficial owners of the Series 2013 Bonds. Under such circumstances, in the event that a successor securities depository is not required under the Indenture or obtained, bond certificates are required to be printed and delivered in accordance with the Indenture.

So long as Cede & Co., or any successor thereto, is the registered owner of the Series 2013 Bonds, as DTC’s partnership nominee, references herein to the Bondholders or Owners or Holders or registered owners of the Series 2013 Bonds shall mean DTC and shall not mean the Beneficial Owners of the Series 2013 Bonds. During such period, the Trustee, and the Issuer will recognize DTC or its partnership nominee as the owner of all of the Series 2013 Bonds for all purposes, including the payment of the principal and Redemption Price of and interest on the Series 2013 Bonds, as well as the giving of notices and voting.

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THE ISSUER AND THE TRUSTEE CANNOT AND DO NOT GIVE ANY ASSURANCES THAT DTC, THE DIRECT PARTICIPANTS OR THE INDIRECT PARTICIPANTS WILL DISTRIBUTE TO THE BENEFICIAL OWNERS OF THE SERIES 2013 BONDS (1) PAYMENTS OF PRINCIPAL OR REDEMPTION PRICE OF, OR INTEREST ON, THE SERIES 2013 BONDS, (2) CONFIRMATION OF BENEFICIAL OWNERSHIP INTEREST IN THE SERIES 2013 BONDS, OR (3) REDEMPTION OR OTHER NOTICES SENT TO DTC OR CEDE & CO., ITS NOMINEE, AS THE REGISTERED OWNER OF THE SERIES 2013 BONDS, OR THAT THEY WILL DO SO ON A TIMELY BASIS, OR THAT DTC, DIRECT PARTICIPANTS OR INDIRECT PARTICIPANTS WILL SERVE AND ACT IN THE MANNER DESCRIBED IN THIS OFFICIAL STATEMENT. THE CURRENT “RULES” APPLICABLE TO DTC ARE ON FILE WITH THE SECURITIES AND EXCHANGE COMMISSION, AND THE CURRENT “PROCEDURES” OF DTC TO BE FOLLOWED IN DEALING WITH DIRECT PARTICIPANTS ARE ON FILE WITH DTC.

NEITHER THE ISSUER AND THE TRUSTEE WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO ANY PARTICIPANT OR ANY BENEFICIAL OWNER OF THE SERIES 2013 BONDS OR ANY OTHER PERSON NOT SHOWN ON THE REGISTRATION BOOKS OF THE REGISTRAR AS BEING A BONDHOLDER WITH RESPECT TO: (1) THE SERIES 2013 BONDS; (2) THE ACCURACY OF ANY RECORDS MAINTAINED BY DTC OR ANY DIRECT OR INDIRECT PARTICIPANT; (3) THE PAYMENT OF ANY AMOUNT DUE TO ANY DIRECT OR INDIRECT PARTICIPANT OR BENEFICIAL OWNER IN RESPECT OF THE PRINCIPAL OR REDEMPTION PRICE OF OR INTEREST ON THE SERIES 2013 BONDS; (4) THE DELIVERY BY DTC TO ANY DIRECT PARTICIPANT, OR BY ANY PARTICIPANT TO ANY BENEFICIAL OWNER OF ANY NOTICE WHICH IS REQUIRED OR PERMITTED UNDER THE TERMS OF THE INDENTURE OR THE SERIES 2013 BONDS TO BE GIVEN TO OWNERS OF THE SERIES 2013 BONDS; (5) THE SELECTION OF BENEFICIAL OWNERS TO RECEIVE PAYMENT IN THE EVENT OF ANY PARTIAL REDEMPTION OF THE SERIES 2013 BONDS; OR (6) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS THE REGISTERED OWNER OF THE SERIES 2013 BONDS.

The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that the Issuer believes to be reliable, but the Issuer takes no responsibility for the accuracy thereof.

SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS

Limited Obligations

Limited Obligations of the Issuer

The Series 2013 Bonds and the other obligations of the Issuer provided for in the Indenture including, without limitation, the payment of operating expenses related to the Projects, will be limited obligations of the Issuer and are payable by the Issuer solely out of the Trust Estate. The Series 2013 Bonds and the other expense reimbursement obligations of the Issuer provided for in the Indenture, including, without limitation, operating expenses of the Projects, shall never be payable out of any funds of the Issuer except the Trust Estate.

THE SERIES 2013 BONDS AND INTEREST THEREON AND THE REDEMPTION PRICE THEREOF ARE LIMITED OBLIGATIONS OF THE ISSUER, THE PRINCIPAL AND REDEMPTION PRICE OF AND INTEREST ON WHICH ARE PAYABLE SOLELY FROM THE TRUST ESTATE. NEITHER THE SERIES 2013 BONDS NOR THE INTEREST THEREON NOR THE REDEMPTION PRICE THEREOF IS A DEBT, LIABILITY OR A PLEDGE OF THE FULL FAITH AND CREDIT OF THE STATE OF MARYLAND, ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER. THE ISSUANCE OF THE SERIES 2013 BONDS IS NOT DIRECTLY, INDIRECTLY, OR CONTINGENTLY A MORAL OR OTHER OBLIGATION OF THE STATE OF MARYLAND, ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER, TO LEVY OR PLEDGE ANY TAX OR TO MAKE ANY APPROPRIATION TO PAY THE SERIES 2013 BONDS. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF MARYLAND, ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, INTEREST ON, OR THE REDEMPTION PRICE OF, THE SERIES 2013 BONDS. THE ISSUER HAS NO TAXING POWER.

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The Ground Lessor, the State, the System and the University Not Responsible for Payment

Neither the Ground Lessor nor the State nor the System nor the University is responsible, directly or indirectly, for the payment of the principal or Redemption Price of and interest on the Series 2013 Bonds or for the payment of any operating expenses of the Projects.

Indenture

The obligations of the Issuer under the Indenture and the Bonds will be secured by the Indenture. Pursuant to the Indenture, the Issuer has granted, bargained, sold, conveyed, assigned and pledged to the Trustee, and granted to the Trustee a security interest in, the Indenture Trust Estate, which is defined to include, among other things, all of the right title and interest of the Issuer in and to (a) the Revenues and (b) any moneys and securities from time to time on deposit in any fund, account or subaccount (excluding the Rebate Fund) created by the Indenture, including the Revenue Fund, the Debt Service Fund, the Interest Account, the Principal Account, the Debt Service Reserve Fund, the Insurance and Condemnation Award Fund, the Redemption Fund, the Construction Fund, the Construction Account, the Capitalized Interest Account, the Contingency Allowance Account, the Issuance Cost Fund, the Capital and Furnishings Fund, the Management Fees Fund, the Surplus Fund, and any and all accounts and subaccounts in any of the foregoing.

The Trustee will be entitled to reasonable compensation for all services rendered by it under the Indenture including its services as Registrar and Paying Agent, together with its reasonable expenses (including reasonable fees of its counsel), charges and other disbursements and those of its counsel, agents and employees incurred in and about the administration and execution of the trusts created by the Indenture and the exercise of its powers and the performance of its duties under the Indenture, and will have a lien therefor on any and all funds at any time held by it under the Indenture prior to any Bonds Outstanding.

Because of certain risks associated with pledging and granting a security interest in collateral, and realizing value upon disposition of collateral of the nature described above, potential investors should not rely solely upon such collateral as providing security for the Series 2013 Bonds. See “CERTAIN BONDHOLDERS’ RISKS – Certain Interests and Claims of Others” herein.

Deed of Trust

Grant

The obligations of the Issuer under the Indenture and the Bonds are also secured by the Deed of Trust, pursuant to which the Issuer has granted, bargained, sold and conveyed to the Individual Trustees for the benefit of the Trustee a lien on, and granted to the Trustee a security interest in, among other things, (a) the Issuer’s entire leasehold interest under the Ground Lease, (b) the Improvements, (c) the Equipment Collateral, (d) all of the rents, royalties, issues, profits, revenues, income and other benefits of the Property, or arising from the use or enjoyment of all or any portion thereof, or from any lease or agreement pertaining thereto and all right, title and interest of the Issuer in and to, and remedies under (but not the Issuer’s obligations and burdens under), any and all leases and subleases of the Property, or any part thereof, and all accounts, general intangibles and other rights growing out of or in connection with such leases and subleases, together with all proceeds thereof, and (e) all of the Issuer’s rights, options, powers and privileges in and to (but not the Issuer’s obligations and burdens under) all architectural, engineering and similar plans, specifications, drawings, reports, surveys, plats, permits and the like, contracts for construction, operation and maintenance of, or provision of services to, the Property. See “DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS – SUMMARY OF CERTAIN PROVISIONS OF THE DEED OF TRUST – Property Subject to the Deed of Trust” in Appendix B hereto.

Partial Release

If either, but not both, of the Series 2012 Bonds or the Series 2013 Bonds are satisfied and discharged, or defeased, in full, then the Ground Lessor may elect to terminate the Ground Lease as to the Phase I Project or the

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Phase II Project, respectively, provided that (i) the Trustee shall have received written confirmation from all rating agencies then providing ratings on the Bonds that such ratings would not be reduced as a result of such termination and (ii) the other conditions set forth in the Ground Lease and the Deed of Trust are also satisfied. See “DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Release of Phase I Project; Release of Phase II Project” and – SUMMARY OF CERTAIN PROVISIONS OF THE DEED OF TRUST – Transfer of Property” in Appendix B hereto. If the Ground Lessor were to make such election, the Phase II Project or the Phase I Project, as the case may be, would be released from the lien of the Deed of Trust, and the Issuer’s leasehold interest in such property and the Revenues derived therefrom would no longer secure the repayment of the series of Bonds remaining outstanding. See “THE GROUND LEASE – Partial Termination of Ground Lease” and “CERTAIN BONDHOLDERS’ RISKS – Partial Termination of Ground Lease and Partial Release of Deed of Trust.”

Revenue Fund

Not later than 1:00 p.m. on each Business Day, the Issuer will deposit, or cause to be deposited, with the Trustee all Revenues from the Property received prior to the close of business of the Property on the preceding calendar day.

The Revenues and any other moneys that are required to be deposited in the Revenue Fund will be promptly deposited by the Trustee in the Revenue Fund.

Subject to the payment by the Trustee from the Revenue Fund, upon Issuer Order, of any and all Administrative Expenditures that are due and payable and identified in such Issuer Order, and except as otherwise expressly provided in the Indenture, the Trustee shall transfer moneys in the Revenue Fund, on the twenty-fifth (25th) day of each month (or on the next succeeding Business Day if the twenty-fifth (25th) day of a month is not a Business Day) (or more frequently upon Issuer Order), as follows and in the following order of priority:

FIRST: to the Manager for deposit by it into the Operating Account held by the Manager, the amount, if any, necessary to make the amount on deposit therein equal to the amount budgeted in the Budget for operating expenses of the Projects and any Additional Project for the next succeeding month (excluding any Management Fees, to the extent subordinated, but including the Issuer’s Annual Fee), all as certified in writing to the Trustee by the Manager and the Issuer.

SECOND: to the Interest Account, the amount, if any, necessary (after taking into account moneys in the Capitalized Interest Account) to make the amount on deposit therein equal to the amount of accrued and unpaid interest on the Bonds Outstanding as of the first day of the immediately succeeding month (in the case of any Outstanding Bonds that bear interest at a variable rate, calculated on the basis of the actual interest rates borne by such Bonds through the date of such transfer and assuming such Bonds bear interest during any period after the date of such transfer at an annual rate equal to 110% of the interest rate borne by such Bonds on the date of such transfer).

THIRD: to the Principal Account, an amount per month equal to the lesser of (A) one-twelfth of the amount of any principal of the Bonds Outstanding maturing or becoming due by reason of mandatory sinking fund redemption on the immediately succeeding June 1 and (B) the amount required to make the amount on deposit in the Principal Account equal to the principal amount, if any, of Bonds Outstanding maturing or becoming due by reason of mandatory sinking fund redemption on the immediately succeeding June 1.

FOURTH: to the Debt Service Reserve Fund, beginning in the month immediately succeeding any month in which there occurs a deficiency in the Debt Service Reserve Fund, the amount of such deficiency until the amount credited to the Debt Service Reserve Fund equals the Debt Service Reserve Fund Requirement for the Series 2012 Bonds, the Series 2013 Bonds and any Additional Bonds secured thereby.

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FIFTH: to the Capital and Furnishings Fund, one-twelfth (1/12th) of the Capital and Furnishings Fund Requirement for that Fiscal Year.

SIXTH: to the Management Fees Fund, an amount equal to the subordinated Management Fees due, payable and/or accrued to the Manager as certified in writing to the Trustee by the Issuer.

SEVENTH: to the Surplus Fund, any amount remaining in the Revenue Fund after all other required transfers and payments.

If any transfers from the Revenue Fund or other funds or accounts are not sufficient to make the deposits or transfers described above, the amounts of the resulting deficiencies will be added to the immediately succeeding required deposits or transfers until cured.

If moneys in the Revenue Fund are not sufficient to pay Administrative Expenditures due and payable and identified in an Issuer Order, as provided above, the Trustee shall pay such Administrative Expenditures from moneys not representing proceeds of the Bonds on deposit in the funds and accounts in the reverse order of priority as set forth in clauses FIRST through SEVENTH above.

Whenever a payment is to be made from any fund or account listed above in clauses FIRST through SIXTH and moneys are not sufficient therefor, the Trustee is required to transfer or cause to be transferred to such fund or account any moneys not constituting the proceeds of the Bonds in an amount equal to such deficiency from any fund and account that falls below the fund or account from which payment is to be made in the reverse order of priority set forth in clauses FIRST through SEVENTH above.

Surplus Fund

Under the Indenture, a Surplus Fund has been created into which moneys remaining in the Revenue Fund shall be transferred after the first six transfers described above. If, on any date on which money from the Revenue Fund is to be (i) disbursed upon Issuer Order to pay any and all Administrative Expenditures that are due and payable and identified in such Issuer Order, or (ii) transferred in order to make the deposits or transfers described in paragraphs FIRST through SIXTH under the heading “Revenue Fund” above, money on deposit in the Revenue Fund is not sufficient to enable the Trustee to make such disbursements, deposits or transfers, the Trustee shall immediately use moneys from the Surplus Fund, first, to pay such Administrative Expenditures and second, to make deposits or transfers to the funds and accounts in the order of priority set forth under the heading “Revenue Fund” above.

On each date which is 10 days following receipt by the Trustee of the annual audited financial statements of the Issuer relating to the Property (or if such 10th day is not a Business Day, the immediately succeeding Business Day) (a “Release Date”), the amounts on deposit in the Surplus Fund, if any, shall first be used by the Trustee to make the following transfers from the Surplus Fund, regardless of whether the Release Test described below has been satisfied:

(1) to the Debt Service Reserve Fund, any amount necessary to make the funds on deposit therein equal to the Debt Service Reserve Fund Requirement;

(2) to the Capital and Furnishings Fund, any amount necessary to make the funds on deposit therein equal to the Capital and Furnishings Fund Requirement;

(3) to the Issuer, an amount of money equal to the Issuer’s Administrative Fee, as certified in writing to the Trustee by the Issuer; and

(4) to the Manager, an amount of money equal to the Operating Carryover as certified to the Trustee by the Issuer and the Manager.

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On each Release Date, after the transfers above, the Trustee will apply the lesser of (x) the balance remaining in the Surplus Fund or (y) the amount equal to the amount that was on deposit in the Surplus Fund as of the June 30 immediately preceding such Release Date (such lesser amount is herein referred to as the “Available Surplus”), if any, in the following order of priority:

(i) to the Management Fees Fund any amount necessary to replenish any deficiency in any account therein relating to any previous Fiscal Year;

(ii) to deliver to the Issuer the amount specified by the Issuer in an Issuer Order to be deposited by the Issuer in the Project Operating Reserve Fund held by the Issuer pursuant to the Ground Lease (see “THE GROUND LEASE – Operating Reserve Fund” herein);

(iii) upon Issuer Order, at the instruction of the University, to transfer to the Redemption Fund for the optional redemption of the Bonds in accordance with the Indenture; and

(iv) in satisfaction of the Issuer’s obligation to pay rent under the Ground Lease in the amount (to the extent funds are available) as certified to the Trustee in writing by an Authorized Officer of the Issuer.

Provided, however, that the application of Available Surplus as described in clauses (i) through (iv) above shall be made only if the Trustee has received a written certificate from an Authorized Officer of the Issuer certifying to the best of such Authorized Officer’s knowledge that no Event of Default has occurred and is continuing under the Indenture and a certificate of an Independent Public Accountant certifying that the Coverage Ratio for the most recent Fiscal Year of the Projects for which audited annual financial statements have been delivered to the Trustee was not less than 1.20 (the “Release Test”); and provided further, that in no event shall the amount released exceed the amount equal to the amount that was on deposit in the Surplus Fund as of the June 30 immediately preceding the Release Date. The Trustee shall not apply any moneys as described in clause (iv) above until it has received the Issuer Order described in clause (ii) above and has applied moneys as described in clause (ii) above.

Redemption Fund

On the 2013 Closing Date, the Trustee shall transfer from the Redemption Fund the sum of $13,623,750.21 to be applied to the redemption, in accordance with the Indenture, of all of the outstanding Series 2003 Bonds. See “DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Redemption Fund” in Appendix B hereto.

Debt Service Reserve Fund

Under the Indenture, a Debt Service Reserve Fund has been created for the benefit of the Bonds. On the 2013 Closing Date, $989,250 of transferred proceeds of the Series 2003 Bonds will remain on deposit in the Debt Service Reserve Fund in satisfaction of the Debt Service Reserve Fund Requirement for the Series 2013 Bonds. See “ESTIMATED SOURCES AND USES OF FUNDS” herein. Upon the issuance of the Series 2013 Bonds, the aggregate amount credited to the Debt Service Reserve Fund (including the amount held in satisfaction of the Debt Service Reserve Fund Requirement for the Series 2012 Bonds) will satisfy the Debt Service Reserve Fund Requirement for the Bonds. The Debt Service Reserve Fund will be used to pay principal or Redemption Price of and interest on the Bonds to the extent there are insufficient funds on deposit in the Debt Service Fund on the date payment is due, after transferring moneys to the extent necessary to make up such deficiency as described in the last paragraph under the heading “Revenue Fund” above. If any amounts are withdrawn from the Debt Service Reserve Fund or if the value of assets credited to the Debt Service Reserve Fund is less than the Debt Service Reserve Fund Requirement, deposits from the Revenue Fund into the Debt Service Reserve Fund are required as described above under the heading “Revenue Fund.” If Additional Bonds are issued, the Debt Service Reserve Fund will be required to be increased by an amount equal to the Debt Service Reserve Fund Requirement, if any, for such Additional Bonds, and a separate account may be established within the Debt Service Reserve Fund exclusively securing such Additional Bonds. A separate debt service reserve fund may be created for any other

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series of Additional Bonds. A separate account securing only the Series 2013 Bonds has not been established within the Debt Service Reserve Fund.

Capital and Furnishings Fund

The Capital and Furnishings Fund is a trust fund to which the Trustee will be required to transfer moneys from the Revenue Fund in an amount equal to the Capital and Furnishings Fund Requirement as described above under the heading “Revenue Fund.” Moneys in the Capital and Furnishings Fund shall be disbursed by the Trustee to or for the account of the Issuer at any time upon the written requisition of an Authorized Officer of the Issuer to be applied to the payment of the costs of (i) repair, renewal and replacement of furnishings, fixtures, mechanical and structural systems and any other major components of the Property, (ii) reconstruction of the Projects or any Additional Project and (iii) any Capital Improvements to the Property. Moneys on deposit in the Capital and Furnishings Fund will also be used as described in the last two paragraphs under the heading “Revenue Fund” above. Failure to deposit within any Fiscal Year an amount equal to the Capital and Furnishings Fund Requirement for such Fiscal Year shall not constitute an Event of Default.

Operating Account

The Operating Account is a checking account maintained by the Manager to which the Trustee will be required to transfer moneys from the Revenue Fund as described above under the heading “Revenue Fund.” Amounts on deposit in the Operating Account will be used by the Manager to pay the operating expenses of the Projects unless applied as described in the last two paragraphs under the heading “Revenue Fund” above. Under the Management Agreement, the Manager agrees to return to the Trustee any moneys deposited in the Operating Account (to the extent not distributed to pay Permitted Expenses) for deposit in the Revenue Fund upon an Event of Default or to which the Trustee is entitled as described in the penultimate paragraph under the heading “Revenue Fund” above.

Title and Property Insurance

A mortgagee’s title insurance policy or a commitment therefor will be delivered in the amount of not less than the outstanding principal amount of the Bonds (including the original aggregate principal amount of the Series 2013 Bonds) less the amount of the Debt Service Reserve Fund Requirement with respect to the Bonds to insure that the Trustee will have a valid first priority lien on the Issuer’s leasehold interest in and to the Property, subject only to Permitted Encumbrances and the standard exclusions from the coverage of such policy. Under such title insurance policy, the Trustee will not be permitted to recover more than the fair market value of any property that is lost as a result of a title defect. The Issuer will agree in the Indenture to keep the Projects fully insured against fire and other casualties and to maintain certain specified amounts of liability and business interruption insurance. See “DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Required Insurance” in Appendix B hereto.

Satisfaction and Discharge

The Indenture provides that if at any time the Issuer shall pay or cause to be paid the principal or Redemption Price of and interest on all Bonds at the times and in the manner stipulated therein, in the Indenture and in any Supplemental Indenture authorizing or approving the issuance of any Additional Bonds, and shall pay or cause to be paid all Administrative Expenditures, then the pledge of any Revenues and other property pledged under the Indenture and all other rights granted under the Indenture to the Bonds shall be discharged and satisfied. In such event, upon the request of the Issuer, the Trustee shall execute and deliver to the Issuer all such instruments as may be desirable to evidence such discharge and satisfaction, and the Trustee shall pay or deliver to the Issuer, or to such officer, board or body as may then be entitled by law to receive the same, all property held by it pursuant to the Indenture (other than any moneys and securities required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption).

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The Indenture also provides that a Series 2012 Bond, a Series 2013 Bond and any other Additional Bond (except as otherwise provided in the Supplemental Indenture authorizing the issuance thereof) shall be deemed to be paid for all purposes of the Indenture when: (i) payment of the principal or Redemption Price of such Bond, plus interest thereon to the due date thereof (whether such due date is by reason of maturity or upon redemption as provided therein) shall have been either: (a) made or caused to be made in accordance with the terms thereof, or (b) provided for by irrevocably depositing with the Trustee (or other method satisfactory to the Trustee for the payment of the Bonds) in trust and irrevocably setting aside exclusively for such payment the following: (1) moneys sufficient, without reinvestment, to make such payment, and/or (2) Government Obligations, not subject to prepayment or call, maturing as to principal and interest in such amounts and at such times as will insure the availability of sufficient moneys to make such payment; and (ii) all necessary and proper fees, compensation and expenses of the Issuer and all Administrative Expenditures with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of the Trustee in case of payments due the Trustee and in all other cases as evidenced by a certificate from the person to whom payment is due. At such times as a Bond shall be deemed to be paid under the Indenture, as aforesaid, such Bond shall no longer be secured by or entitled to the benefits of the Indenture, except for the purposes of any such payment from such moneys or Government Obligations, as the case may be.

See “DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Defeasance” in Appendix B hereto.

Additional Bonds

The Indenture permits the issuance of Additional Bonds secured on parity in all respects with the Series 2012 Bonds and the Series 2013 Bonds. If certain conditions contained in the Indenture are met, including the consent of the Ground Lessor, Additional Bonds may be issued under and secured by the Indenture and the proceeds used by the Issuer to pay any one or more of the following: (i) refunding or advance refunding any Outstanding Bonds; (ii) obtaining funds necessary to complete the acquisition, construction, furnishing or equipping of the Phase II Project or any Additional Projects and (iii) obtaining funds to finance or refinance the costs of acquisition, construction, furnishing or equipping of Additional Projects. The costs to be incurred by the Issuer in connection with the issuance and sale of any such Additional Bonds, the establishment of necessary reserves and the payment of interest prior to and during construction and (if deemed advisable by the Principal Underwriters) for a limited period after the completion of the Phase II Project or any such Additional Projects, shall be included within each of the foregoing authorized purposes. The issuance of Additional Bonds shall be authorized by a Supplemental Indenture of the Issuer, which shall specify all matters required to be provided as described in the Indenture.

See “DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Authorization of Additional Bonds” in Appendix B hereto and “CERTAIN BONDHOLDERS’ RISKS – Additional Bonds” herein.

Revenue Covenant

The Indenture requires the Issuer to fix, charge and collect, or cause to be fixed, charged and collected, fees, rentals, rates and charges in each Fiscal Year for the use of the Property that shall be at least sufficient to produce in each Fiscal Year a Coverage Ratio as of the last day of such Fiscal Year that is not less than 1.20. The Issuer, from time to time as often as necessary, shall revise or cause to be revised such fees, rentals, rates and charges to the extent required to comply with the provisions of the preceding sentence. Compliance with the Revenue Covenant shall be tested for each Fiscal Year, as shown on the Issuer’s annual audited financial statements required by the Indenture.

If in any Fiscal Year the fees, rentals, rates and charges imposed and collected by the Issuer in connection with its operation of the Property shall be less than the amount required in the preceding paragraph, then and in every such case the Issuer shall promptly employ, in accordance with the Indenture, a Management Consultant to submit a written report and recommendations with respect to the fees, rentals, rates and charges imposed and collected by the Issuer in connection with its operation of the Property and with respect to improvements or changes

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in the operations or management of the Property or the services rendered by the Issuer. The Issuer shall require any Management Consultant employed thereunder to file, within 30 days following delivery by the Issuer of the annual audited financial statements to the Trustee, its report and recommendations with the Trustee, the Ground Lessor, the Rating Agency, the Manager and any Bondholders that shall have filed with the Issuer a written request therefor. Any Management Consultant may recommend (with respect to the fees, rentals, rates or other charges imposed by the Issuer and with respect to improvements or changes in the operations or management of the Property or the services rendered by the Issuer) that the Issuer either (i) make no change, or (ii) make some change, even though such recommendation is not calculated to result in compliance with the provisions of the preceding paragraph if, in the opinion of such Management Consultant, compliance with such recommendation should result in compliance with such provisions to the maximum extent feasible. Upon receipt of the Management Consultant’s report, the Issuer promptly shall revise or cause to be revised the fees, rentals, rates and charges for use of the Property and services provided or to be provided in connection therewith by the Issuer in conformity with any lawful recommendation of the Management Consultant retained pursuant to the Indenture and shall otherwise follow the recommendations of such Management Consultant. If the Issuer shall revise such fees, rentals, rates and charges in conformity with the recommendations of the Management Consultant and otherwise follow such recommendations of the Management Consultant, then the failure to meet the requirements of the preceding paragraph for such Fiscal Year shall not constitute an Event of Default under the Indenture. If approvals of any regulatory or supervisory authority are required in order to fix, charge, collect and otherwise implement any fees, rentals, rates and charges required in connection with such recommendations, the Issuer shall take all action within its power to obtain such approvals in an expeditious manner.

Enforceability of Remedies

The realization of value from the real and personal property comprising the Projects and from the other security for the Bonds upon the occurrence of an Event of Default will depend upon the exercise of various remedies specified by the Indenture and the Deed of Trust. These and other remedies may require judicial actions, which are often subject to discretion and delay and which may be difficult to pursue. See “CERTAIN BONDHOLDERS’

RISKS – Enforceability of Remedies” and – Certain Interests and Claims of Others” herein.

THE GROUND LEASE

General

The Ground Lease will expire on the day immediately preceding the earlier of: (a) June 25, 2043, unless otherwise extended or sooner expired or terminated in accordance with the Ground Lease or by operation of law, and (b) the date on which all of the Bonds and all obligations under any Permitted Leasehold Mortgage, and under any other contracts entered into by the Issuer, with the Lessor’s approval, with respect to the Projects, have been fully repaid, and will have a maximum remaining term of approximately thirty (30) years upon the issuance of the Series 2013 Bonds, unless otherwise extended or sooner expired or terminated in accordance with the terms of the Ground Lease or by operation of law. The Ground Lease is a “net lease” and the Ground Lessor is to receive all payments required to be made by the Issuer free from any charges, assessments, expenses, impositions, set offs, recoupments or deductions of any kind.

Certain Definitions

The definitions set forth below pertain only to this section entitled “THE GROUND LEASE” and are not intended to replace the definitions set forth and used in any other section of this Official Statement.

“Class A Facility” means a Class A, garden style student-oriented apartment rental residential facility. Class A standard shall be the industry standard in the vicinity of the Projects, as determined by a national organization which creates such standards, reasonably selected by the Ground Lessor.

“Leasehold Mortgage” means a mortgage, deed of trust or other security interest encumbering, at any time, any or all of the leasehold estate granted to the Issuer under the Ground Lease, and any other security or collateral granted therein existing at any time under any other form of security instrument or arrangement used from time to time, including but not limited to (a) any such other form of security arrangement arising under any deed of trust,

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sale-and-leaseback documents, lease-and-leaseback documents, security deed or conditional deed, or any financing statement, security agreement or other documentation used pursuant to the Uniform Commercial Code or any successor or similar statute, and (b) any loan agreement, trust indenture or other agreements evidencing or governing that indebtedness, the payment of which is secured by any of the above, provided that such mortgage, deed of trust or other form of security instrument, and an instrument evidencing any such other form of security arrangement, has been recorded among the land records of Wicomico County, Maryland or in such other place as is, under applicable law, required for such instrument to give record notice of the matters set forth therein.

“Leasehold Mortgagee” means a Person (as defined in the Ground Lease) to whom, or for whose benefit, a Leasehold Mortgage has been conveyed, including an institutional lender acting as trustee or escrow agent under a trust indenture, trust agreement, escrow agreement or similar arrangement.

“Manager” means EDR Management Inc. (formerly known as Allen & O’Hara Education Services, LLC) or any permitted successors or assigns to its obligations under the Manager Agreement in effect as of the date of issuance of the Series 2013 Bonds or any other person engaged by the Issuer to perform under a Manager Agreement.

“Manager Agreement” means any agreement under which the Issuer engages a Manager as permitted under the Ground Lease.

“Net Revenues” means for any period of time, (a) Gross Revenues (as defined in the Ground Lease) for such period of time, plus (b) Operating Carryover at the end of the immediately preceding period, minus (c) Permitted Expenses.

“Operating Carryover” means for any Lease Year (as defined in the Ground Lease) an amount equal to the lesser of (a) 10% of the Permitted Expenses in the annual budget for such Lease Year and (b) the amount of Net Revenues for such Lease Year before deduction of the Operating Carryover.

“Operating Reserve Fund” means the Project Operating Expense Reserve Fund (as defined in the Indenture).

“Permitted Expenses” mean all expenses actually paid by or for the Issuer in connection with the operation, maintenance and repair of the Property (as defined in the Ground Lease); all costs and expenses, including attorneys’ fees in connection with the enforcement by the Issuer of the Ground Lease, the Project Contracts or a Manager Agreement; all Administrative Expenditures (as defined in the Ground Lease) and any other cost or expense identified as a Permitted Expense in the Ground Lease, subject to the following limitations: (i) the nature and amount of such expenses are reasonable and customary and have not been incurred as a result of waste, negligence, willful misconduct, or mismanagement of the Issuer, the Manager or their respective agents, employees, delegates, successors or assigns; (ii) the amount of such expenses is consistent with the Annual Budget or is incurred to pay the costs of maintaining the insurance required by the Ground Lease or the Manager Agreement; (iii) the expense is not part of the Financing Costs (as defined in the Ground Lease) or the capital portion of the Annual Budget (as defined in the Ground Lease), unless approved by the University and the System; and (iv) the amount was not paid or incurred, directly or indirectly, as a result of or in connection with a failure of the Manager to comply with the Manager Agreement.

“Permitted Leasehold Mortgage” means a mortgage or deed of trust that satisfies the requirements set forth in the Ground Lease. The Deed of Trust is a Permitted Leasehold Mortgage.

“Permitted Leasehold Mortgagee” means a Person (as defined in the Ground Lease) secured by a Permitted Leasehold Mortgage. The Trustee is a Permitted Leasehold Mortgagee.

“Project Contracts” means each contract or agreement for the development, design or construction of the Projects.

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“University Community” means the Persons belonging to the following classifications in the order of priority listed: (1) enrolled full-time or part-time undergraduate or graduate students of the University who wish to renew a Rental Agreement; (2) undergraduate or graduate students enrolled or to be enrolled full-time at the University; (3) undergraduate or graduate students enrolled or to be enrolled part-time at the University; (4) undergraduate or graduate students enrolled or to be enrolled at other Maryland state institutions of higher education; (5) undergraduate or graduate students enrolled or to be enrolled at other local institutions of higher education; and (6) University faculty and staff.

Calculation of Annual Rent

The annual rental payment payable by the Issuer under the Ground Lease is equal to the “Net Revenues” minus (a) debt service on the Bonds and any prepayments and redemptions thereof, minus (b) any additional deposits to reserves required under the Bond Documents, minus (c) such other deposits, transfers or uses approved or directed by the System as contemplated in the Ground Lease and minus (d) the Operating Carryover at the end of the period.

Amendments and Modifications; Cancellation

The Ground Lease may be amended by, and only by, an instrument executed and delivered by each party to the Ground Lease and each Permitted Leasehold Mortgagee.

Operation and Management

The Ground Lease requires the Issuer to operate the Projects as Class A Facilities to serve the University Community. The Ground Lease also requires the Issuer to engage a Manager under a written contract to manage and operate the Projects in accordance with the Ground Lease and to perform, on behalf of the Issuer, all of the covenants, agreements and obligations of the Issuer with respect to the operation and management of the Projects. Certain requirements (such as maximum manager fees and priority of payment of manager fees) for a Manager Agreement are set forth in the Ground Lease.

Inclusion of Projects in University Materials

The University has agreed, pursuant to the Ground Lease, that, if it includes any off-campus project in any of its housing information provided to its students, similar information shall be provided about the Projects. All referrals, if any, made to any off-campus student housing facility shall also be made to the Projects without preference to any. The University may include a statement to the effect that the housing provided by the Projects is not “on-campus,” is not owned or managed by the University, is privately managed housing and a disclaimer to the effect that the University does not have any responsibility for the Projects.

At any time, the University has agreed to provide the Manager, upon request, a list of currently enrolled students living in “on-campus” residence halls. After June 15th of each year for the fall semester and December 15th for the spring semester, upon the request of the Manager, the University has agreed to provide a list of students who are admitted to the University but are wait-listed for “on-campus” housing. The Manager may use these lists for the Projects.

Limitations on Additional Residential Facilities

Except as provided below, the University, pursuant to the Ground Lease, has agreed that it will not construct, manage, or operate or contract with another person to construct, manage or operate any “Off-Campus” (as defined herein) student housing facility, within five (5) miles of the Land, other than the Projects. “Off-Campus” means (a) any real property which is owned by neither the University nor the State (including the System) for the benefit of or on behalf of the University and (b) any real property which is owned by either the University or the State (including the System) for the benefit of or on behalf of the University and is being leased or sold to a third party for the purposes of constructing student housing facilities. The University will not include materials for “Off-

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Campus” student housing facility as part of its “on-campus” student housing information, unless such information is being provided as part of a general listing or information offering of all “Off-Campus” student housing availability.

The restriction on additional residential facilities described above shall not apply if:

(a) the new facility is being constructed to replace existing beds, is projected to be completed by the September 1st immediately succeeding two (2) years after the date any beds are closed, and contains not more than 110% of the number of beds being replaced, or

(b) the State appropriates money (either by identifying the specific use in the budget presented in support of a current fund appropriation or by authorizing the use of State general obligation bonds) for a new facility, or

(c) the new facility is part of a program, approved by the System, to renovate existing student housing (e.g, through the temporary closing of existing student housing facilities) such that the aggregate number of beds that the University expects to have available each Lease Year are not materially increased, or

(d) the coverage ratio and rate covenant as approved by the System in the Bond Documents shall have been satisfied for the Lease Year immediately preceding the approval of the construction, acquisition, lease or support of such new facility by the Board of Regents of the System, or

(e) the average occupancy of the Projects for the two (2) Lease Years immediately preceding the approval of the construction, acquisition, lease or support of such new facility by the Board of Regents of the System was at least 85% occupied (based on the number of available beds during each twelve (12) month Lease Year) and revenues from the Projects are sufficient to pay all Permitted Expenses and debt service on the Initial Financing.

Operating Reserve Fund

Pursuant to the Ground Lease, the Issuer has agreed to make certain deposits into the Operating Reserve Fund. If moneys are not otherwise made available to the Issuer for the costs and expenses hereinafter described in this sentence, the Issuer may draw upon the Operating Reserve Fund to pay, in its sole and absolute discretion, (i) Permitted Expenses, (ii) similar costs and expenses with respect to other student housing projects of the System and (iii) any other cost or expense approved by the System in accordance with the Ground Lease. The Operating Reserve Fund is created for the benefit of the Issuer, is not held by the Trustee and is not part of the Trust Estate. The moneys on deposit in the Operating Reserve Fund are not subject to any lien and the owners of the Series 2013 Bonds shall have no right to the moneys deposited therein.

Events of Default

Each of the following events constitutes an “Event of Default” under the Ground Lease: (i) the Issuer fails (a) to pay any rent or other sum which it is obligated to pay under the Ground Lease, when and as it is due and payable or (b) to perform any of its other obligations under the Ground Lease; or (ii) if a bankruptcy on the part of the Issuer should occur.

If an Event of Default occurs pursuant to (i) above, the Ground Lessor will not exercise any right or remedy on account thereof which it holds under the Ground Lease or applicable law unless and until the Ground Lessor has given written notice thereof to the Issuer and the Permitted Leasehold Mortgagee; and (A) the Issuer has failed, within 10 days after the Ground Lessor gives such notice, to cure an Event of Default arising out of the Issuer’s failure to pay a monetary amount, or (B) the Issuer, in respect to any other Event of Default on its part, has failed, within 30 days after the Ground Lessor gives notice to cure, to cure any other Event of Default (or, if and only if such Event of Default is not reasonably curable within such period of 30 days, to proceed within such period actively, diligently and in good faith to begin to cure such Event of Default and to continue thereafter to do so until it is fully cured, but in no event later than 60 days).

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There is no notice or cure right with respect to any Event of Default pursuant to (ii) above (provided, however that the Ground Lessor will be obligated to give the Permitted Leasehold Mortgagee any notice and opportunity to exercise any rights as required under the Ground Lease).

Notice and cure shall not apply to and shall not be afforded: (i) if explicitly withheld elsewhere in the Ground Lease, or (ii) in respect to an Event of Default for which notice has been previously given and cure was not completed in a timely manner.

Ground Lessor’s Rights on Event of Default

If an Event of Default occurs and has not been cured within any applicable cure period, the Ground Lessor may, subject to certain provisions of the Ground Lease, take any or all of the following actions:

(a) reenter and repossess any or all of the Property, subject to the operation, lien and effect of the Indenture and all other documents executed and delivered in connection therewith including any Permitted Leasehold Mortgage;

(b) perform, on behalf and at the expense of the Issuer, any obligation of the Issuer under the Ground Lease which the Issuer has failed to perform, the cost of which performance shall be payable by the Issuer to the Ground Lessor with interest as set forth in the Ground Lease upon demand as additional rent;

(c) enforce, in the name of and on behalf of, the Issuer, any and all rights and remedies with respect to the Project Contracts, the Manager Agreement and any security therefor;

(d) cure such Event of Default in any other manner; and

(e) pursue any combination of such remedies and/or any other right or remedy available to the Ground Lessor in respect to the Issuer on account of such Event of Default under the Ground Lease or at law or in equity, other than termination of the Ground Lease.

In addition to the rights and remedies set forth above, but subject to the limitation on the right to exercise certain remedies as set forth below, if an Event of Default occurs and is continuing and if the Board of Regents of the System shall have authorized the termination of the Ground Lease after the occurrence of such Event of Default and the expiration of applicable cure periods, then the Ground Lessor may terminate the Ground Lease by giving written notice of such termination to the Issuer and to the Permitted Leasehold Mortgagee, which termination shall be effective as of the date given in that notice.

The Ground Lessor shall not be able to terminate the Ground Lease as described above if:

(a) the Issuer or any Permitted Leasehold Mortgagee is diligently pursuing the cure of the Event of Default, as described in the Ground Lease, including removal of the Manager and engaging a replacement manager;

(b) the Property is being managed, operated and used solely as residences for the University Community in accordance with the Ground Lease; and

(c) Gross Revenues (as defined in the Ground Lease) are used first to pay those Permitted Expenses as are reasonably appropriate or necessary to operate and maintain the Projects in such a manner as to prevent material impairment of the value or use of the Property for its intended purposes and to pay Administrative Expenses prior to application to any other purpose.

The Issuer or any Permitted Leasehold Mortgagee shall be deemed to be diligently pursuing the cure of any Event of Default if all necessary, reasonable and appropriate actions are being taken, or have been taken, to attempt to cure such Event of Default, notwithstanding the fact that such Event of Default may never be cured or be capable of being cured. In addition, if any Event of Default is curable only by the payment of money, then neither the Issuer

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nor any Permitted Leasehold Mortgagee shall have failed to have been diligently pursuing a cure if monies available to effect such cure are not sufficient to do so.

Ownership of Projects

Subject to the terms and conditions of the Ground Lease, the title to all improvements, furnishings and equipment located on the Property shall be vested in the Issuer until termination of the Ground Lease, at which time all title to and ownership of them automatically and immediately shall vest in the Ground Lessor.

Under the Ground Lease, the Ground Lessor has an option to purchase the leasehold estate created thereunder for a purchase price of $1.00 plus the amount necessary to discharge (or defease) in full on the date the purchase is consummated all Permitted Leasehold Mortgages, if any, and all amounts outstanding under any contracts approved by the System, in accordance with the terms thereof, including, without limitation, all fees and expenses incidental thereto, plus any other amounts owed under the Project Contracts.

Partial Termination of Ground Lease

If either, but not both, of the Series 2012 Bonds or the Series 2013 Bonds are satisfied and discharged, or defeased, in full, then the Ground Lessor may elect to terminate the Ground Lease as to the Phase I Project or the Phase II Project, respectively, provided that (i) the Trustee shall have received written confirmation from all rating agencies then providing ratings on the Bonds that such ratings would not be reduced as a result of such termination and (ii) the other conditions set forth in the Ground Lease and the Deed of Trust are also satisfied. In connection with any such partial termination, the Ground Lessor and the Issuer agree in the Ground Lease to provide such cross-easements, including access and utility easements, over, across, under and through the Phase I Project Site or Phase II Project Site as may be reasonably requested to further the continued use of the Phase II Project and the Phase I Project. See “DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Release of Phase I Project; Release of Phase II Project” and – SUMMARY OF CERTAIN PROVISIONS OF THE DEED OF TRUST – Transfer of Property” in Appendix B hereto. If the Ground Lessor were to make such election, the Phase II Project or the Phase I Project, as the case may be, would be released from the lien of the Deed of Trust, and the Issuer’s leasehold interest in such property and the Revenues derived therefrom would no longer secure the repayment of the series of Bonds remaining outstanding. See “SECURITY AND SOURCES OF

PAYMENT FOR THE SERIES 2013 BONDS – Deed of Trust” and “CERTAIN BONDHOLDERS’ RISKS – Partial Termination of Ground Lease and Partial Release of Deed of Trust” herein.

THE ISSUER

The Issuer is a body politic and corporate and is constituted as an instrumentality created pursuant to the Act. The Issuer was established by statute in 1984 to assist in and complement existing programs of the Maryland Department of Business and Economic Development, by, among other things, providing direct property development capability for economic development purposes. Pursuant to the terms of the Act, the Issuer is authorized to issue revenue bonds for projects (as defined in the Act).

Membership and Organization

The Act provides that the Issuer shall be managed by a Board of Directors consisting of twelve (12) residents of the State of Maryland. The Secretaries of Business and Economic Development and Transportation serve as ex-officio voting Directors. The remaining ten members of the Board are appointed by the Governor with the advice and consent of the Senate to four-year terms. Two of these ten are to be representatives of local government, three are to be knowledgeable in real estate or commercial financing, three are to be knowledgeable in industrial development or industrial relations, and two are to be members of the general public. The Board of Directors elects a chair, vice chair, and treasurer from among its members. Subject to the approval of the Governor, the Board appoints an Executive Director who serves at the pleasure of the Board as the chief administrative officer of the Issuer, managing its administrative affairs and technical activities in accordance with the policies and

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procedures established by the Board. In addition to the Executive Director, the Issuer has eight full-time employees and one part-time professional employee.

Robert C. Brennan was appointed the Executive Director of the Issuer in May, 2004. Prior to his appointment, Mr. Brennan served in the Maryland Department of Business and Economic Development as the Assistant Secretary for the Rural Regions in Maryland and administered the Department’s financing programs. Mr. Brennan began his professional career as an asset-based lender with Maryland National Industrial Finance, and he spent twenty years in the commercial banking and leasing industry. Prior to leaving the field of banking, Mr. Brennan held the title of Senior Vice President of First Fidelity Bank.

The members of the Board of Directors of the Issuer are as follows:

Martin G. Knott, Jr., Chairman; term expires June 30, 2015; Knott Mechanical, Inc. Douglas Hoffberger, Vice Chairman; term expires June 30, 2015; Keystone Realty Company, Inc. Scott E. Dorsey, Treasurer; term expires June 30, 2016; Merritt Properties, LLC. Dominick E. Murray, ex-officio; Secretary of Business and Economic Development. Darrell B. Mobley, ex-officio; Acting Secretary of Transportation. Dana B. Stebbins, term expires June 30, 2015; The Cornelius Group. Frederick J. Puente, term expires June 30, 2016; Blind Industries and Services of Maryland. David H. Michael, term expires June 30, 2014; The Michael Companies, Inc. Herbert D. Frerichs, Jr., Esquire, term expires June 30, 2014; Venable LLP. Barbara G. Buehl, term expires June 30, 2016; Allegany County Department of Tourism. Jennifer R. Terrasa, Esquire; term expires June 30, 2014; Member, Howard County Council.

There is currently one vacancy on the Board of Directors. Unless removed, members of the Board of Directors serve until reappointed or a successor is appointed and qualifies.

Powers

The Act authorizes the Issuer, among other things, to acquire, improve, develop, manage, market, maintain, lease as lessor or as lessee and operate any project (as defined in the Act) in the State; to acquire, purchase, hold, lease as lessee, and use any property necessary or convenient to carry out its purposes; to borrow money and issue bonds to finance any part of the cost of its projects; to secure the payment of such borrowing by pledge of or deed of trust on its properties or revenues; to accept loans, grants or assistance of any kind from the federal government, a governmental unit, or a private source; to fix and collect rates, rentals, fees and charges for services and facilities it provides or makes available; and to do all things necessary or convenient to carry out the powers expressly granted by the Act.

Bonds and Notes

As of June 30, 2012, the Issuer had total outstanding bonds and notes of approximately $2,471,000,000 including indebtedness with respect to over 142 projects of various types, including mortgages, notes, revenue bonds, lease revenue bonds, industrial revenue bonds, adjustable rate pooled financing revenue bonds, and first mortgage revenue bonds. The Issuer is also a party to direct financing leases and operating leases.

The several series of outstanding bonds and notes issued by the Issuer are limited obligations of the Issuer, payable solely from revenues of the Issuer received in connection with the respective projects financed or refinanced, and do not constitute general obligations of the Issuer, and the full faith and credit of the Issuer is not pledged to the payment of the principal or Redemption Price of and interest on these series of bonds. Although certain revenue bonds issued by the Issuer have been in default as to principal and interest, the sources of payment for such defaulted bonds are separate and distinct from the source of payment for the Bonds.

Assets of the Issuer other than the Trust Estate are not available to satisfy claims of holders of the Bonds. Property and funds held by or mortgaged to the Issuer for a particular issue of bonds are not available to satisfy claims of holders of other issues of the Issuer’s bonds. The Issuer has no taxing power.

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The Issuer intends to issue other series of bonds and notes for the purpose of financing and refinancing projects, and each such series will be issued pursuant to a resolution or trust agreement separate and apart from any other resolution or trust agreement, except to the extent a series of bonds may be issued on a parity with bonds of another series if permitted by the applicable resolution or trust agreement or issued pursuant to a general bond resolution of the Issuer.

NOTWITHSTANDING ANYTHING IN THE INDENTURE CONTAINED TO THE CONTRARY, THE ISSUER SHALL IN NO WAY BE LIABLE FOR ANY PAYMENT REQUIRED TO BE MADE UNDER THE INDENTURE (INCLUDING, WITHOUT LIMITATION, PRINCIPAL OF AND INTEREST ON THE BONDS AND OPERATING EXPENSES OF THE PROJECTS) EXCEPT FROM REVENUES OF THE PROJECTS, IF ANY, MADE AVAILABLE THEREFOR PURSUANT TO THE TERMS OF THE INDENTURE, AND ANY CLAIM BASED ON OR IN RESPECT OF ANY LIABILITY OF THE ISSUER FOR (I) THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON, OR THE REDEMPTION PRICE OF, THE BONDS, OR (II) THE PERFORMANCE OR PAYMENT OF ANY OTHER AMOUNT, COVENANT, AGREEMENT, TERM, OR CONDITION CONTAINED IN THE INDENTURE, THE DEED OF TRUST, OR ANY OTHER DOCUMENT EXECUTED AND DELIVERED IN CONNECTION WITH THE BONDS SHALL BE PAID SOLELY OUT OF, AND ENFORCED SOLELY AGAINST, SUCH REVENUES TO THE EXTENT AVAILABLE UNDER THE INDENTURE AND, IN EITHER CASE, NOT AGAINST ANY OTHER ASSETS, PROPERTIES, OR FUNDS OF THE ISSUER OR AGAINST ANY ASSETS, PROPERTIES, OR FUNDS OF (A) ANY DIRECTOR, OFFICER, EMPLOYEE, SUCCESSOR, ASSIGN, OR AGENT OF THE ISSUER, OR (B) ANY OTHER PERSON, CORPORATION, OR OTHER ENTITY AFFILIATED WITH ANY OF THE FOREGOING, INCLUDING, WITHOUT LIMITATION, THE STATE, ANY POLITICAL SUBDIVISION THEREOF, OR ANY AGENCY, PUBLIC BODY, OR INSTRUMENTALITY THEREOF.

THE PROJECTS

The Phase I Project

The Phase I Project, known as University Park Apartments – Phase I, is a garden apartment style, residential facility consisting of (i) seven 3-story student housing buildings, containing a total of 144 four-bedroom units, (ii) parking for approximately 422 vehicles and (iii) a clubhouse and pool. In addition, there is a two-bedroom manager unit for a total of 578 beds. Each apartment is fully furnished and has a full complement of kitchen appliances, computer connections to the high speed University fiber optic system and fire/panic alarm security monitoring. Amenities in the clubhouse include, among other things, a fitness center, computer lab/business center, pool/game room, video room, a general purpose/meeting room, storage and marketing/management facilities. The Phase I Project is located on a 12-acre (approximate) site (the “Phase I Project Site”) adjacent to the east campus (recreational core) of the University.

The Phase II Project

The Phase II Project, known as University Park Apartments – Phase II, is a 108-unit, 312-bed student housing facility, contained in four residential buildings, comprised of (a) 48 four-bedroom, four-bathroom units, (b) 36 two-bedroom, two-bathroom units, and (c) 24 two-bedroom, one-bathroom units. There are no resident advisor units in the Phase II Project. Each apartment is fully furnished and has a full complement of kitchen appliances, fire sprinkler system and computer connections to the high speed University fiber optic system and fire/panic alarm security monitoring. In addition, the Phase II Project has 430 parking spaces, 100 of which are used by occupants of the Phase I Project. Residents of the Phase II Project have access to the Phase I Project clubhouse. The Phase II Project is situated on a 9-acre (approximate) site (the “Phase II Project Site”) south of and adjacent to the east campus (recreational core) of the University.

The Projects are located on contiguous parcels of land. See “CERTAIN BONDHOLDERS’ RISKS – Competitive Environment” herein.

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THE MANAGER AND MANAGEMENT AGREEMENT

General

The Manager is EDR Management Inc. (formerly known as Allen & O’Hara Education Services, LLC) (the “Manager”). The Manager is a subsidiary of Education Realty Trust, Inc. (“EdR”), the ultimate parent of a member of the development team that developed the Projects.

EdR is one of America’s largest owners, developers and managers of collegiate housing. It owns or manages 60 communities in 23 states with more than 34,100 beds within more than 11,100 units. As a self-administered and self-managed real estate investment trust, EdR is a publicly traded REIT on the New York Stock Exchange (stock symbol EDR). Since 2000, EdR has developed nearly 40 on-campus projects comprising nearly 25,000 beds.

Management Agreement

The Manager manages and maintains the Projects pursuant to a Consolidated, Amended and Restated Management Agreement (the “Management Agreement”). Under the Management Agreement, the Manager is responsible for the collection of all rents and payment of all operating expenses relating to the Projects. In addition to these duties, the Manager assures proper scheduled maintenance of the Projects, including daily, monthly, and annual maintenance requirements.

The Manager’s responsibilities under the Management Agreement include hiring, training, and overseeing the on-site manager and staff. The Manager has agreed to manage, operate, and maintain the Projects in compliance with the standards, rules, and procedures outlined in the Ground Lease. In connection with the management, operation, and maintenance of the Projects, the Manager is required to provide, or cause to be provided, and is responsible for, among other things, (i) the preparation of a marketing program for the Projects and the supervision of all advertising layouts, brochures, campaigns, and model units; (ii) the preparation on behalf of, and with the approval of, the Issuer of the Projects’ operating budgets describing in detail all of the revenue and expenses entailed in the operation and maintenance of the Projects and the submission of the same to the Ground Lessor and the Issuer for their approval; (iii) the preparation on behalf of the Issuer of a capital budget describing the source and use of funds necessary or appropriate to repair, replace, refurbish, remodel or rehabilitate the Projects or any of their capital components and the submission of the same to the Issuer and the University for their approval; (iv) the implementation of the marketing program, the operating budget, and the capital budget (collectively, the “Management Plans”); and (v) the collection of all rents and other charges due for services provided in connection with the use or occupancy of the Projects.

The Manager, in fulfilling its duties and obligations under the Management Agreement, has agreed to operate, manage, and lease the Projects in the same manner as is customary and usual in the operation, management, and leasing of comparable student residential facilities and is obligated to provide such services as are customarily provided by operators of such complexes of comparable class and standing as the Projects.

Termination

The Management Agreement has an initial term ending on June 30, 2014, unless terminated earlier in accordance with the provisions thereof. At the expiration of the initial term, the Management Agreement will automatically renew for an additional two-year term, unless on or before ninety (90) days prior to the expiration of the initial term the Issuer (independently or at the request of the University) or the Manager shall notify the other in writing that it elects to terminate the Management Agreement.

The Management Agreement may also be terminated by either the Manager or the Issuer, without payment or penalty, immediately (or on such notice as is specified below) in the event of (a) a bona fide sale of the Projects, (b) the total demolition or casualty of the Projects (such that the same shall become untenantable and the Projects shall not be promptly restored) or condemnation of a substantial portion of the Projects, or (c) if any one or more of the following events shall occur and be continuing: (i) if the Manager shall assign the Management Agreement or

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delegate its duties under the Management Agreement without the written consent of the Issuer; (ii) if any material license held by the Manager and necessary for the performance of its duties or services under the Management Agreement shall be terminated or suspended, provided that a default under this clause shall not occur if (x) the Manager arranges for the reinstatement of such license within fifteen (15) days after its termination or suspension; (y) the Issuer is not subject to any criminal liability or unbonded civil liability during such period; and (z) the Manager pays all costs and expenses, including reasonable attorneys' fees and expenses, incurred by the Issuer in connection with the matter in question in providing a substitute for the Manager during such period; (iii) if the Manager or any of its directors, officers, employees or agents shall misappropriate any funds of the Issuer or otherwise be guilty of gross negligence, willful misconduct, fraud, malfeasance or breach of fiduciary duty in connection with the Manager's duties under the Management Agreement and the Manager shall not (x) make full restitution thereof (if applicable) within five (5) business days after the Manager's discovery thereof and (y) thereafter (1) permanently bar the director, officer, employee, agent or other representative who misappropriated such funds or committed such act from acting in any capacity with respect to the Projects or (2) make other arrangements reasonably satisfactory to the Issuer; provided, however, that the Manager shall be allowed to undertake the remedial action set forth in subsections (x) and (y) on a one-time basis only, and the commission of any act described herein after any such remedial action shall constitute a default; (iv) if the Manager shall fail to pay any amount payable to the Issuer or the Ground Lessor under the Management Agreement when due and such default shall continue for five (5) business days after notice thereof to the Manager or if the Issuer shall fail to pay any amount payable to the Manager under the Management Agreement when due and such default shall continue for five (5) business days after notice thereof to the Issuer; (v) if the Manager shall fail to follow any reasonable written direction of the Issuer or the Ground Lessor with respect to the Projects which direction complies with the Management Agreement and such default shall continue for fifteen (15) days after notice of such default given by the Issuer to the Manager; (vi) if (x) the Manager shall commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due, or shall take any corporate action to authorize any of the foregoing; or (y) an involuntary case or other proceeding shall be commenced against the Manager seeking liquidation, reorganization or other relief with respect to it or its debts under any bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of thirty (30) days; or (z) an order for relief shall be entered against the Manager under any bankruptcy, insolvency, reorganization or other similar law now or hereafter in effect; (vii) if either the Manager or the Issuer shall fail to comply in any material respect with any provision of the Management Agreement (other than those described in clauses (i) through (vi) above); (viii) if either the Manager or the Issuer shall default in the performance of any of their respective obligations under the Management Agreement and such default shall continue for at least thirty (30) days after written notice from one party to the defaulting party designating such default, the party not in default may terminate the Management Agreement upon at least ten (10) days' prior written notice to the defaulting party; or (ix) if the Manager fails to follow the recommendations of a Management Consultant required of the Manager by the Issuer in accordance with the provisions of the Indenture, or if the Revenue Covenant is not satisfied for two (2) consecutive Fiscal Years.

In addition, the Issuer may terminate the Management Agreement without cause, upon ninety (90) days’ advance written notice to the Manager, in which case, the Manager shall be immediately paid any incurred and unpaid Management Fees.

Management Fee

The management fee payable to the Manager is a fixed amount of $12,500 per month, subject to adjustment and a variable amount equal to a percentage of Rental Revenues (4.375% decreasing over time to 4.25%), but in no event to exceed a cap of 5% of Rental Revenues. See “THE GROUND LEASE – Operation and Management” herein. Eighty percent (80%) of such fee will be payable from the Operating Account and the remaining twenty percent (20%) of such fee will be subordinated to the payment of scheduled indebtedness and other amounts. Subordinated management fees are payable from amounts, if any, available in the Management Fees Fund, and any

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subordinated management fee not paid will be deferred to succeeding fiscal years to the extent of moneys available in the Management Fees Fund. See “DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS – Summary of Certain Provisions of the Indenture – Management Fees Fund” in Appendix B hereto and “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013

BONDS - Surplus Fund” herein. No interest will be paid with respect to deferred management fees.

Assignment of Management Agreement

The Issuer has assigned to the Trustee as security for the Bonds all of its right, title and interest in and to the Management Agreement.

THE UNIVERSITY

The University is a regionally accredited, four-year comprehensive university with 4 schools offering 42 undergraduate, 14 graduate degree programs and 4 post baccalaureate certificate programs. All of its schools are endowed: the Franklin P. Perdue School of Business, Charles R. and Martha N. Fulton School of Liberal Arts, Richard A. Henson School of Science and Technology, and the Samuel W. and Marilyn C. Seidel School of Education and Professional Studies. The 181-acre campus, which has national arboretum status, includes 34 buildings, two art galleries, a National Public Radio station and the Edward H. Nabb Research Center for Delmarva History and Culture, an archive of Eastern Shore family history. The University is accredited by the Middle States Association of Colleges and Secondary Schools.

The University is one of eleven degree granting institutions in the System. The System shares common governance through one Board of Regents. The System also submits a unified budget request to the Maryland General Assembly and engages in a consolidated annual audit.

Governance of the University

The University is currently governed by the Board of Regents of the System. The Board of Regents of the System consists of 17 members appointed by the Governor as follows: (i) one member is a full-time student in good academic standing at one of the System’s institutions; (ii) one member is the State Secretary of Agriculture, ex-officio; and (iii) the remaining members are residents of the State appointed from the general public. Regents are appointed by the Governor, with the advice and consent of the State Senate. Except for the Secretary of Agriculture, who serves ex-officio, and the student regent, who serves for one year, Regents serve five-year terms. The Board elects its own officers.

Student Enrollment

The following schedule indicates the Fall Semester enrollment at the University for each of the last five academic years:

Academic Year (Fall)

Undergraduate*

Graduate*

Total*

FTEs**

2012 7,969 688 8,657 8,027 2011 7,892 714 8,606 7,974 2010 7,706 691 8,397 7,747 2009 7,557 647 8,204 7,584 2008 7,281 587 7,868 7,355

___________________________ *Numbers include both part-time and full-time students. **Full-time equivalents, which are calculated based on number of course hours.

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Applications

The following table shows the number of applications, acceptances and enrollments for the fall semester of each of the last five academic years.

Freshman Applications, Eligibility and Enrollments

Fall of

Academic Year

Applications

Received

Applicants Admitted

Ratio of Admissions

to Applications

Enrolled

Ratio of Enrollments to

Admissions

2012 8,866 4,676 53% 1,232 26% 2011 8,021 4,232 53% 1,248 29% 2010 7,739 4,129 53% 1,250 30% 2009 7,525 4,026 54% 1,276 32% 2008 7,275 3,856 53% 1,199 31%

SAT Scores

The University established a SAT/ACT optional admissions policy for applicants applying for admission in the Fall of 2008. Applicants who have earned a cumulative weighted grade point average (GPA) of 3.50 or higher on a 4.0 scale may choose whether or not to submit their standardized test scores. The following table presents information on the mean scores for the SAT Reasoning Test for freshmen entering during the fall semester of the academic years from 2008-2012:

Academic Year (Fall) Freshman SAT Scores*

2012 1,724 2011 1,711 2010 1,701 2009 1,691 2008** 1,682 ___________________________ *The maximum score possible on the SAT Reasoning Test is 2400. **First class for which the submission of standardized test scores was optional for applicants with a cumulative weighted grade point average

(GPA) of 3.5 or higher on a 4.0 scale.

Existing Housing for University Students

The table below shows the student housing that currently exists on the campus of the University.

Salisbury On-Campus Student Housing Housing Number of Beds

Nanticoke Hall 151 Manokin Hall 77 Wicomico Hall 78 Pocomoke Hall 77 Choptank Hall 234 Chester Hall 234 Severn Hall 265 St. Martin Hall 300 Chesapeake Hall 178 Dogwood Village 140 Sea Gull Square 605 University Park Apartments* 888 TOTAL ON-CAMPUS HOUSING 3,227

_______________________ *The Phase I Project and the Phase II Project.

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The University considers the Projects to be on-campus housing, but it is not obligated to do so. See “THE GROUND LEASE – Inclusion of Projects in University Materials” and “CERTAIN BONDHOLDERS’ RISKS – Exclusion of Projects from On-Campus Housing” herein.

Residency Requirement

The University has instituted a two-year residency requirement for all freshmen beginning with the fall 2013 class. Such students will be required to live in campus housing for four semesters. Freshmen beginning in the 2014 spring semester will be required to live on-campus for three semesters. The University may grant exemptions from the residency requirement in certain circumstances including exemptions for (i) students living at home with their parents, legal guardians or immediate family members in Wicomico, Worcester, Somerset, Dorchester or Sussex (DE) counties, (ii) students who at the time of enrollment are at least 21 years of age, (iii) students who are married or caring for dependent children, and (iv) students who have completed military service. In addition, at the end of the first year of on-campus residence, students can also be considered for an off-campus exemption if they have achieved a 3.5 cumulative GPA and will have completed at least 30 credits of study at the University. Since their opening, the University has included the Projects in its stock of on-campus housing, but it is not obligated to do so. In addition, the University currently allows only returning students to live in the Projects. See “THE GROUND LEASE – Inclusion of Projects in University Materials,” “THE UNIVERSITY – Existing Housing for University Students” and “CERTAIN BONDHOLDERS’ RISKS – Exclusion of Projects from On-Campus Housing” herein.

Sources

The University is the source for all information herein concerning the University. All information for investors regarding the University is contained in this Official Statement. The University maintains an Internet website for various purposes. None of the information on this website is intended to assist investors in making any investment decision with respect to the Series 2013 Bonds or to provide any information to investors. The Issuer takes no responsibility for the accuracy and completeness of such information and such information is not to be construed as a representation of the Issuer.

NEITHER THE GROUND LESSOR NOR THE STATE NOR THE SYSTEM NOR THE UNIVERSITY IS LIABLE FOR THE BONDS

OTHER THAN AS SET FORTH IN THE GROUND LEASE, NEITHER THE GROUND LESSOR, THE STATE, THE SYSTEM NOR THE UNIVERSITY HAS ANY OBLIGATION WITH RESPECT TO THE PROJECTS. THE BONDS ARE NOT OBLIGATIONS OF THE GROUND LESSOR, THE STATE, THE SYSTEM OR THE UNIVERSITY, AND NEITHER THE GROUND LESSOR, THE STATE, THE SYSTEM NOR THE UNIVERSITY IS RESPONSIBLE FOR THE PAYMENT OF THE PRINCIPAL OR REDEMPTION PRICE OF, AND INTEREST ON, THE BONDS. NEITHER THE GROUND LESSOR NOR THE STATE NOR THE SYSTEM HAS MADE ANY REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF THIS INFORMATION AND NEITHER HAS ENTERED INTO ANY AGREEMENT TO UPDATE THIS INFORMATION OR TO PROVIDE ANY CONTINUING DISCLOSURE. OTHER THAN AS SET FORTH IN THE GROUND LEASE, NEITHER THE GROUND LESSOR, THE STATE, THE SYSTEM NOR THE UNIVERSITY IS SPONSORING OR OTHERWISE PROVIDING ANY FINANCIAL SUPPORT FOR THE PROJECTS.

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HISTORICAL OCCUPANCY AND COVERAGE RATIOS

Historical average occupancy rates relating to the Projects together with the Coverage Ratio calculated in accordance with the Indenture for each of the fiscal years ending June 30, 2009 through 2012 have been prepared by the Issuer based on information provided by the Manager and are presented below.

Fiscal Year Ended June 30, 2009 2010 2011 2012 Average Academic Year Occupancy1 100.00% 99.74% 99.95% 99.25% Net Income Available for Debt Service $3,549,063 $3,565,178 $3,874,167 $4,284,218 Maximum Annual Debt Service $2,415,800 $2,415,800 $2,415,800 $2,415,800 Coverage Ratio 1.47 1.48 1.60 1.77 _______________________________________

1Based on an academic year consisting of 10 months.

CASH FLOW FORECAST

A Cash Flow Forecast (the “Cash Flow Forecast”) relating to the Projects and their ability to generate revenues from operations sufficient to pay principal and interest on the Bonds and operating expenses for each of the years ending June 30, 2013 through 2017 has been prepared by the Issuer based on information provided by the Manager and is presented below.

The Cash Flow Forecast shows the Series 2013 Bonds bearing interest at a yield of approximately 3.55% and the Series 2012 Bonds bearing interest at a yield of approximately 3.78%. Both the Series 2012 Bonds and the Series 2013 Bonds are structured to produce approximately level annual debt service through their respective final maturities. Rental revenues are based on a mix of academic year contracts covering a ten-month period (August through May) and annual contracts with assumed academic year occupancy of 97%. Revenue for the Projects also includes earnings on the Debt Service Reserve Fund. In order to satisfy the Debt Service Reserve Fund Requirement for the Series 2013 Bonds, $989,250 of transferred proceeds of the Series 2003 Bonds will remain on deposit in the Debt Service Reserve Fund held for the Series 2012 Bonds and the Series 2013 Bonds in satisfaction of the Debt Service Reserve Fund Requirement for the Series 2013 Bonds. Investment earnings on this portion of the Debt Service Fund have been calculated at an assumed rate of 0.5% per annum. See “SECURITY AND

SOURCES FOR THE PAYMENT OF THE SERIES 2013 BONDS – Debt Service Reserve Fund” herein. The deposit to the Debt Service Reserve Fund upon the issuance of the Series 2012 Bonds in the amount of $1,167,250 in satisfaction of the Debt Service Reserve Fund Requirement for the Series 2012 Bonds is invested in a Repurchase Agreement with Portigon AG (formerly known as WestLB AG) (the “Repurchase Agreement”). The Repurchase Agreement has a stated maturity of June 30, 2030 and an interest rate of 5.95% per annum. In addition to the regular estimated costs for operating the Projects, the Cash Flow Forecast includes an annual deposit to the Capital and Furnishings Fund, which is equal to $250 per bed in fiscal year 2013. Eighty percent (80%) of the annual management fee paid to the Manager is shown as an operating expense and is not subordinate. Twenty percent (20%) of the annual management fee is shown as subordinate to debt service on the Series 2012 Bonds and the Series 2013 Bonds in accordance with the Management Agreement. Income and expense estimates, including the deposit to the Capital and Furnishings Fund, are escalated at an assumed rate of 3% per annum.

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The achievement of any financial forecast is dependent upon future events, the occurrence of which cannot be assured. Therefore, the actual results achieved may vary from the Cash Flow Forecast. Such variation could be material. See “FORWARD LOOKING STATEMENTS” and “CERTAIN BONDHOLDERS’ RISKS – Actual Results May Differ from the Cash Flow Forecast” and “Forward Looking Statements” herein.

Fiscal Year Ending June 30,

20131 2014 2015 2016 2017

Revenues:

Net Rental Revenue $6,484,312 $6,610,129 $6,808,433 $7,012,686 $7,223,066

Debt Service Reserve Fund Earnings2 42,707 49,042 49,070 49,070 49,070

Total Revenues $6,527,019 $6,659,171 $6,857,503 $7,061,756 $7,272,136

Expenses:

Operating Expenses $1,909,733 $2,102,322 $2,165,392 $2,230,353 $2,297,264

Management Fee3 226,951 224,744 231,487 238,431 245,584

Issuer’s Annual Fees4 26,875 26,290 25,305 24,300 23,260

Total Expenses $2,163,559 $2,353,356 $2,422,183 $2,493,085 $2,566,108

Net Operating Income $4,363,460 $4,305,815 $4,435,319 $4,568,671 $4,706,028

Total Maximum Annual Debt Service5 2,156,500 2,156,500 2,156,500 2,156,500 2,156,500

Subordinate Expenses:

Capital and Furnishings Fund Deposits6 222,500 229,175 236,050 243,132 250,426

Issuer’s Administrative Fees7 32,635 33,296 34,288 35,309 36,361

Subordinate Management Fees3 56,738 56,186 57,872 59,608 61,396

Operating Carryover Account Deposits 6,476 6,676 6,883 7,090 7,302

Operating Reserve Fund Deposits 20,000 20,000 20,000 20,000 20,000

Combined Debt Service Coverage8 1.98 1.96 2.01 2.07 2.14

Net Cash Flow $1,868,611 $1,803,982 $1,923,727 $2,047,033 $2,174,043 1 The forecast for fiscal year 2013 is based on 12 months of operations for the Phase II Project and, because the Issuer has owned the Phase I Project only since the end of July, 2012, 11 months of operations for the Phase I Project. 2Amounts shown are net of rebate payments. 3 Management fee is paid 80% as a senior expense and 20% as a subordinated expense. 4 Assumes 0.10% of par amount for Series 2012 Bonds and the Series 2013 Bonds. 5 Based on actual debt service on the Series 2012 Bonds and the Series 2013 Bonds. 6 Calculation based on $250 per bed in fiscal year 2013. 7 Issuer’s Administrative Fee is 0.5% of Revenues and is paid on a subordinated basis. 8 Combined debt service coverage calculation includes payment of subordinated Issuer’s Administrative Fees and subordinated management fees.

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FORWARD LOOKING STATEMENTS

This Official Statement and particularly the information contained under the caption “CASH FLOW FORECAST” herein contain statements relating to future results that are “forward looking statements” as defined in the Private Securities Litigation Reform Act of 1995, as amended. When used in this Official Statement, the words “estimate,” “forecast,” “intend,” “expect,” and similar expressions identify forward looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward looking statements. Among the factors that may cause projected revenues and expenditures to be materially different from those anticipated include (1) the ability of the Issuer or the Manager on behalf of the Issuer to market the Projects, (2) the ability of the Projects to maintain sufficient occupancy at projected increased rent levels especially in light of the expectation that a new project will be available for occupancy by students in the vicinity of the Projects, (3) the ability of the residents of the Projects to meet their financial obligations, (4) lower than anticipated revenues, (5) higher than anticipated operating expenses, (6) litigation, (7) changes in governmental regulation, (8) loss of federal tax-exempt status, (9) loss of State property tax exemption, (10) changes in demographic trends, (11) competition from other residential rental and student housing facilities, (12) changes in the student housing industry and (13) general economic conditions. No representation or assurance can be made that revenues will be generated from the operation of the Projects in amounts sufficient to pay maturing principal and interest on the Bonds. Prospective purchasers of the Series 2013 Bonds should not place undue reliance on those forward looking statements and should review the factors described under the heading “CERTAIN BONDHOLDERS’ RISKS” herein for a discussion of certain risk factors that should be considered in connection with an investment in the Series 2013 Bonds.

CERTAIN BONDHOLDERS’ RISKS

General

AN INVESTMENT IN THE SERIES 2013 BONDS INVOLVES SUBSTANTIAL RISKS, AND EACH INVESTOR SHOULD CONSIDER THE RISKS INVOLVED TO DETERMINE THE SUITABILITY OF INVESTING IN THE SERIES 2013 BONDS. The tax-exempt feature of the Series 2013 Bonds is relatively more valuable to high tax bracket investors than to investors who are in the lower tax brackets, and so the value of the interest compensation to any particular investor will vary with such investor’s marginal tax rate. Each prospective investor should, therefore, determine such investor’s present and anticipated marginal tax rate before investing in the Series 2013 Bonds. Each prospective investor should also carefully examine this Official Statement and such investor’s own financial condition (including the diversification of such investor’s investment portfolio) in order to make a judgment as to whether the Series 2013 Bonds are an appropriate investment.

Summarized below is a number of “Bondholders’ Risks” that could adversely affect the operation of the Projects and/or the Bonds that should be considered by prospective investors. The following discussion is not intended to be exhaustive, but includes certain major factors that should be considered.

If revenues from the operation of the Projects are not sufficient to pay their operating expenses and principal of and interest on the Bonds, an Event of Default will occur under the Indenture. Upon an Event of Default, the Bonds may be paid before maturity or applicable redemption dates and a forfeiture of redemption premiums or a loss of principal may result. The Projects’ ability to generate revenues and the overall financial condition of the Projects may be adversely affected by a wide variety of future events and conditions including, without limitation, (i) a decline in the enrollment of the University, (ii) increased competition from other schools, (iii) loss by the University of accreditation, and (iv) failure by the University to meet applicable federal guidelines or some other event that results in students being ineligible for federal financial aid.

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Limited Obligations of the Issuer

The Bonds constitute limited obligations of the Issuer and have three potential sources of payment. The sources of payment are as follows:

(1) Payments received by the Trustee from the Issuer pursuant to the terms of the Indenture.

The Issuer is obligated to make payments on the Bonds and to pay operating expenses of the Projects only from the Trust Estate, which includes revenues to be derived from the operation of the Projects. Furthermore, the Issuer’s ability to meet its obligations under the Indenture, including, without limitation, the payment of the operating expenses related to the Projects, will depend upon achieving and maintaining certain occupancy levels at the Projects throughout the term of the Bonds. Even if the Projects are operating in an efficient manner, other factors could affect the Issuer’s ability to make payments under the Indenture and the Bonds. No assurance can be made that the Projects will generate sufficient revenues to pay maturing principal of or Redemption Price of and interest on the Bonds and the payment of operating expenses of the Projects.

The Issuer has no obligation to pay the Bonds or to pay operating expenses of the Projects except from the Trust Estate. The Bonds and the interest thereon constitute limited obligations of the Issuer and are payable solely from the security and from other assets pledged under the Indenture and the Deed of Trust as security for the payment thereof. The Bonds and the interest thereon do not constitute a debt, liability or pledge of the full faith and credit of the Issuer, the System, the University, the State of Maryland or any governmental unit. The issuance of the Bonds is not directly, indirectly or contingently a moral or other obligation of the State of Maryland or any governmental unit to levy or pledge any tax or to make an appropriation to pay the Bonds or the interest thereon. The Issuer has no taxing power.

(2) Revenues received from operation of the Projects by a receiver upon a default under the Indenture.

It has been the experience of lenders in recent years that attempts to have a receiver appointed to take charge of properties with respect to which loans have been made are frequently met with defensive measures such as the initiation of protracted litigation and bankruptcy proceedings. Such defensive measures can prevent the appointment of a receiver or greatly increase the expense and time involved in having a receiver appointed. See “CERTAIN BONDHOLDERS’ RISKS – Enforceability of Remedies” herein. Accordingly, prospects for uninterrupted payment of principal and interest on the Bonds in accordance with their terms are largely dependent upon revenues generated by the Projects, from which the Issuer will make the payments on the Bonds, and such revenues are wholly dependent upon the success of the Projects.

(3) Proceeds realized from the sale or lease of the Issuer’s leasehold interest in the Projects to a third party by the Trustee at or following foreclosure by the Trustee of the Deed of Trust and proceeds realized from the liquidation of other security for the Bonds.

Debtors frequently employ defensive measures, such as protracted litigation and bankruptcy proceedings, in response to lenders’ efforts to foreclose on real property or otherwise to realize upon collateral to satisfy indebtedness that is in default. Such defensive measures can prevent, or greatly increase the expense and time involved in achieving, such foreclosure or other realization. In addition, the Trustee could experience difficulty in selling or leasing the real and personal property portion of the Projects upon foreclosure due to the special purpose nature of student housing facilities and due to the fact that the Issuer owns only a leasehold interest in the Land, and the proceeds of such sale may not be sufficient to pay fully the owners of the Bonds. See “CERTAIN

BONDHOLDERS’ RISKS – Liquidation of Security May not be Sufficient in the Event of a Default,” – Ground Lease Provisions” and – Special Use Nature of the Projects” herein. As described in paragraph (1) above, prospects for uninterrupted payment of principal and interest on the Bonds in accordance with their terms are largely dependent upon revenues generated by the Projects, from which the Issuer will make the payments described in paragraph (1) above, and such revenues are wholly dependent upon the success of the Projects. Even if the Projects are operating in an efficient manner, other factors could affect the Issuer’s ability to make payments under the Indenture and the Bonds.

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Bankruptcy of Other Ventures of the Issuer Could Impact Payments on the Bonds

The Issuer has engaged in other ventures and may become engaged in other ventures in the future. The filing by the Issuer for relief under the Bankruptcy Code in connection with any other venture may have an adverse effect on the ability of the Trustee and the Bondholders to enforce their claim or claims to the security granted by the Indenture and the Deed of Trust, and their claim or claims to moneys owed them as unsecured claimants, if any. Such a filing would generally operate as an automatic stay of the commencement or continuation of any judicial or other proceeding against the Issuer and its property and as an automatic stay of any act or proceeding to enforce a lien against such property, which may include the Projects even though the Projects are not pledged to secure any other indebtedness. Furthermore, once a bankruptcy court has acquired jurisdiction over the Issuer in connection with the Projects or any other project or venture, such court would likely have the ability to exercise its jurisdiction generally in respect of the Issuer and its assets, including the Projects, and any other project. Under federal bankruptcy law, the Issuer cannot be subject to an involuntary case of bankruptcy filed against it, and in the event of a petition for voluntary bankruptcy, the Bondholders would have the status of a secured creditor.

Neither the Ground Lessor nor the State nor the System nor the University Responsible for Payment

Neither the Ground Lessor nor the State nor the System nor the University is responsible for the payment of the principal or Redemption Price of and interest on the Bonds.

Liquidation of Security May not be Sufficient in the Event of a Default

The Projects are specifically designed as student housing facilities and may not be suitable for other uses. Furthermore, the Projects are located on land adjacent to the east campus (recreational core) of the University which is owned by the Ground Lessor and must be operated as student housing facilities or another governmental purpose to maintain the tax-exempt status of the Bonds. The number of entities that could be expected to purchase or lease the Issuer’s leasehold interest in the Projects is therefore limited, and thus the ability of the Trustee to realize funds from the sale or lease of such leasehold interest upon an event of default may be limited. Such value may be also limited by actual or alleged rights of residents. Any foreclosure proceeding may be subject to substantial delays. The ability of the Trustee to receive funds sufficient to pay the Bonds from any sale or foreclosure of the Issuer’s leasehold interest in the Projects may be limited by a number of factors, including the fact that the Issuer owns only a leasehold interest in the Land, the limited operational use of the Projects as student housing facilities and the fact that the interest on the Bonds may become subject to federal income taxation if the Projects are not operated by a governmental entity as student housing facilities or another governmental purpose.

Ground Lease Provisions

The Ground Lease contains a number of provisions that permit the Ground Lessor to terminate the Ground Lease following a default thereunder. If the Ground Lease is terminated, the Issuer will have no source of funds to pay the principal of and interest on the Bonds. See “THE GROUND LEASE – Ground Lessor’s Rights on Event of Default” herein.

Partial Termination of Ground Lease and Partial Release of Deed of Trust

If either, but not both, of the Series 2012 Bonds or the Series 2013 Bonds are satisfied and discharged, or defeased, in full, then the Ground Lessor may elect to terminate the Ground Lease as to the Phase I Project or the Phase II Project, respectively, provided that (i) the Trustee shall have received written confirmation from all rating agencies then providing ratings on the Bonds that such ratings would not be reduced as a result of such termination and (ii) the other conditions set forth in the Ground Lease and the Deed of Trust are also satisfied. See “DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Release of Phase I Project; Release of Phase II Project” and – SUMMARY OF CERTAIN PROVISIONS OF THE DEED OF TRUST – Transfer of Property” in Appendix B hereto. If the Ground Lessor were to make such election, the Phase II Project or the Phase I Project, as the case may be, would be released from the lien of the Deed of Trust, and the Issuer’s

33

leasehold interest in such property and the Revenues derived therefrom would no longer secure the repayment of the series of Bonds remaining outstanding.

Special Use Nature of Projects

The Projects were constructed to serve as student housing facilities and are located adjacent to the east campus (recreational core) of the University. If it were necessary to sell the Issuer’s leasehold interest in the Projects pursuant to the Deed of Trust upon an Event of Default, this special use nature and construction of the Projects and the fact that the interest to be sold is in the nature of a leasehold interest and subject to the terms of the Ground Lease may curtail the purchase price that could be obtained, and the net proceeds received may be less than the principal amount of Series 2013 Bonds Outstanding. Payment of the Series 2013 Bonds will be, for all practical purposes, almost solely dependent upon the successful operation of the Projects.

Competitive Environment

The Projects are subject to competition from other residential rental and student housing facilities and there can be no assurance that additional student housing facilities will not be built in the vicinity of the University. The occupancy rates for the Projects and the Projects’ ability to generate sufficient income for the Issuer to meet its obligations in connection with the Bonds and the Projects may be adversely affected by any other student housing.

A new, privately owned student housing facility known as “University Orchard at Salisbury” is expected to open for the 2013 fall semester (“University Orchard”). University Orchard is located within ½ mile of the campus of the University and is expected to contain approximately 648 beds configured in 2-bedroom, 2-bath and 4-bedroom, 4-bath apartments. University Orchard is not located on or adjacent to the campus of the University and the University does not have any obligation to provide marketing or other support to University Orchard. The information regarding University Orchard has been obtained from its website found at www.universityorchard.com. There can be no assurance that University Orchard will not adversely affect the occupancy rates for the Projects or the Projects’ ability to generate sufficient revenue to enable the Issuer to satisfy its obligations in connection with the Bonds and the Projects.

Exclusion of Projects from On-Campus Housing

Since their opening, the University has included the Projects in its stock of on-campus housing. The University, however, is not obligated to do so since the Issuer is the leasehold owner of the Land and the Projects. Any decision by the University to treat the Projects as off-campus housing may adversely affect the occupancy rates in the Projects and the Projects’ ability to generate sufficient revenue to enable the Issuer to satisfy its obligations in connection with the Bonds. There can be no assurance that the University will continue to include the Projects in its stock of on-campus housing.

Required Occupancy Levels and Rent and Expense Levels

In order for the Projects to generate sufficient revenues to enable the Issuer to make payments at the times required under the Indenture and the Bonds and to pay operating expenses related to the Projects, the Projects must meet certain occupancy levels and achieve certain rent and expense levels that are assumed in the Cash Flow Forecast. There can be no assurance, however, that the Projects will be able to meet and maintain such required occupancy and rent and expense levels. There can be no assurance that units in the Projects will be continuously leased.

Insurance and Legal Proceedings

The Issuer is required by the Ground Lease, the Indenture and the Deed of Trust to carry property and general liability insurance in amounts consistent with industry practice. However, there can be no assurance that the required coverages will be available at affordable rates or that any current or future claims will be covered by or will not exceed applicable insurance coverage. A claim against the Issuer not covered by, or in excess of, the Issuer’s insurance could have a material adverse effect upon the Projects.

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Governmental Regulation

The housing industry is significantly regulated by the federal and local government. Regulations and conditions affecting the acquisition, development and ownership of residential real estate, including local zoning and land use issues, environmental regulations, the Americans with Disabilities Act, the Fair Housing Amendments Act of 1988 and general conditions in the multi-family residential real estate market, could increase the operating expenses of the Projects or could otherwise have a material adverse effect on the financial condition of the Projects or the results of their operations.

Clean-up Costs and Liens under Environmental Statutes

An environmental assessment of the Phase I Project Site was performed in 1999. At that time, no environmental concerns were identified. However, no update of such assessment has been done and no current Phase I Environmental Assessment has been performed with respect to the Phase I Project or the Phase I Project Site.

An environmental assessment of the Phase II Project Site was performed in 2003. At that time, no environmental concerns were identified. However, no update of such assessment has been done and no current Phase I Environmental Assessment has been performed with respect to the Phase II Project or the Phase II Project Site.

Prospective purchasers of the Series 2013 Bonds may not rely upon the findings contained in any site assessment previously prepared for either of the Projects.

Neither the University nor the Issuer is aware of any enforcement actions currently in process with respect to any releases of pollutants or contaminants at the Land. However, there can be no assurance that an enforcement action or actions will not be instituted under such statutes at a future date. In the event such enforcement actions were initiated, the Issuer could be liable for the costs of removing or otherwise treating pollutants or contaminants located at the Land. In addition, under applicable environmental statutes, in the event an enforcement action were initiated, a lien superior to the Trustee’s lien on behalf of the Bondholders could attach to the Projects, which would adversely affect the Trustee’s ability to realize value from the disposition of the Issuer’s leasehold interest in the Projects upon foreclosure of the Deed of Trust. Furthermore, in determining whether to exercise any foreclosure rights with respect to the Projects under the Indenture or the Deed of Trust, the Trustee and the Bondholders would need to take into account the potential liability of any tenant of the Projects, including a tenant by foreclosure, for clean-up costs with respect to such pollutants and contaminants.

Certain Interests and Claims of Others

Certain interests and claims of others may be on a parity with or prior to the pledge, assignment, and grant of a security interest made in the Indenture and the Deed of Trust, and certain statutes and other provisions may limit the Issuer’s right to make such pledges, assignments, and grants of security interests. Examples of such claims, interests, and provisions include, but are not limited to:

(1) statutory liens,

(2) constructive trusts, equitable liens, or other rights impressed or conferred by any state or federal court in the exercise of its equitable jurisdiction,

(3) federal bankruptcy laws as they affect amounts earned with respect to the Projects after any effectual institution of bankruptcy proceedings by or against the Issuer,

(4) as to those items in which a security interest can be perfected only by possession, including items converted to cash, the rights of third parties in such items not in the possession of the Trustee,

35

(5) items not in the possession of the Trustee, the records to which are located or moved outside the State of Maryland, that are thereby not subject to or are removed from the operation of Maryland law, and

(6) the requirement that appropriate continuation statements be filed in accordance with the Maryland Uniform Commercial Code as from time to time in effect.

Enforceability of Remedies

The practical realization of value upon any Event of Default under the Indenture or the Deed of Trust will depend upon the exercise of various remedies specified therein. These and other remedies may, in many respects, require judicial actions, which are often subject to discretion and delay. Under existing law (including, particularly, federal bankruptcy law), the remedies specified by the Indenture or the Deed of Trust may not be readily available or may be limited. A court may decide not to order the specific performance of the covenants contained in the Indenture or the Deed of Trust. The various legal opinions to be delivered concurrently with the delivery of the Series 2013 Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by state and federal laws, rulings, and decisions affecting remedies, including judicial discretion in the application of the principles of equity, and by bankruptcy, reorganization, or other laws affecting the enforcement of creditors’ rights generally.

Effect of Determination of Taxability

The Issuer will covenant not to take any action that would cause the Series 2013 Bonds to be arbitrage bonds or that would otherwise adversely affect the federal income tax status of interest on the Series 2013 Bonds. The Issuer has also made representations with respect to certain matters within its knowledge that have been relied on by Bond Counsel and that Bond Counsel has not independently verified. Failure to comply with such covenants or the inaccuracy of such representations could cause interest on the Series 2013 Bonds to become subject to federal income taxation retroactively from their date of issuance.

It is possible that a period of time may elapse between the occurrence of the event that causes interest to become taxable and the determination that such an event has occurred. In such a case, interest previously paid on the Series 2013 Bonds could become retroactively taxable from the date of their issuance. Additionally, certain owners of Series 2013 Bonds are subject to possible adverse tax consequences. There is no provision for acceleration of the indebtedness evidenced by the Series 2013 Bonds or for payment of additional interest if interest on the Series 2013 Bonds becomes included in gross income for federal income tax purposes. See “TAX EXEMPTION” herein.

Market for the Series 2013 Bonds

There can be no assurance that a secondary market for the Series 2013 Bonds will exist, or that the Series 2013 Bonds can be sold for any particular price. Accordingly, a purchaser of the Series 2013 Bonds should recognize that an investment in the Series 2013 Bonds may be illiquid and be prepared to have such investor’s funds committed until the Series 2013 Bonds mature or are redeemed.

Actual Results May Differ from Cash Flow Forecast

The Cash Flow Forecast is based upon assumptions concerning future events, circumstances, and transactions as they relate to the Projects. In addition, the Cash Flow Forecast only covers the approximate 5-year period ending June 30, 2017 and consequently does not cover the entire period during which the Series 2013 Bonds may be Outstanding. The achievement of any cash flow forecast or other forecast is dependent upon future events, the occurrence of which cannot be assured. Realization of the results forecasted will depend, among other things, on the implementation by or on behalf of the Issuer of policies and procedures consistent with the assumptions. Future results will also be affected by events and circumstances beyond the control of the Issuer. For the reasons described above, it is likely that the actual results of the Projects will be different from the results forecast in the Cash Flow Forecast included herein, and those differences may be material and adverse.

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Forward Looking Statements

This Official Statement contains certain “forward-looking statements” concerning the operations and financial condition of the Projects. The words “may,” “would,” “could,” “will,” “expect,” “anticipate,” “believe,” “intend,” “plan,” “estimate” and similar expressions are meant to identify these forward-looking statements. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. The Issuer does not plan to issue any updates or revisions to those forward-looking statements if or when changes to its expectations, or events, conditions or circumstances on which such statements are based, occur.

Uncertainty of Investment Income

The investment earnings of and accumulations in certain funds and accounts established by the Indenture have been estimated and are based on assumed earnings’ rates. While these assumptions are believed to be reasonable in view of the rates of return currently available, there is no assurance that similar interest rates will be available on such investments in the future, nor is there any assurance that the potential accumulations assumed will be realized.

Additional Bonds

The Issuer has the right to issue Additional Bonds under the Indenture that will be equally and ratably secured on a parity basis with the Series 2012 Bonds, the Series 2013 Bonds and any other Additional Bonds. See “DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Authorization of Additional Bonds” in Appendix B hereto. SUCH ADDITIONAL BONDS COULD DILUTE THE SECURITY FOR THE SERIES 2013 BONDS.

Risk of Audit by Internal Revenue Service

The Internal Revenue Service has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Internal Revenue Service, interest on such tax-exempt obligations is includible in the gross income of the owners thereof for federal income tax purposes. Certain types of transactions are being targeted for audit, including financings of student housing facilities.

No assurances can be given as to whether the Internal Revenue Service will commence an audit of the Bonds. If an audit is commenced, under current procedures the Internal Revenue Service is likely to treat the Issuer as the taxpayer and the Bondholders may have no right to participate in such procedures. Neither the Underwriter nor Bond Counsel is obligated to defend the tax-exempt status of the Bonds. Neither the Issuer nor Bond Counsel is responsible to pay or reimburse the cost of any Bondholders with respect to any audit or litigation relating to the Bonds.

Taxation of Series 2013 Bonds

An opinion of Bond Counsel has been obtained as described under “TAX EXEMPTION” herein. The opinion of Bond Counsel contains certain exceptions and is based on certain assumptions described herein under the heading “TAX EXEMPTION.” Failure by the Issuer to comply with certain provisions of the Code and covenants contained in the Indenture could result in interest on the Series 2013 Bonds becoming includable in gross income for federal tax purposes, retroactive to their date of issuance.

An opinion of Bond Counsel has been obtained regarding the exemption of interest on the Series 2013 Bonds from certain taxation by the State of Maryland, as described under “TAX EXEMPTION” herein. Bond Counsel has not opined as to whether interest on the Series 2013 Bonds is subject to state or local income taxation in jurisdictions other than Maryland. Interest on the Series 2013 Bonds may or may not be subject to state or local

37

income taxation in jurisdictions other than Maryland under applicable state or local laws. Each purchaser of the Series 2013 Bonds should consult such purchaser’s own tax advisor regarding the taxable status of the Series 2013 Bonds in a particular state or local jurisdiction.

LITIGATION

There is no action, suit, proceeding, inquiry or investigation at law or in equity or before any court, public board or body pending or, to the knowledge of the Issuer, threatened (or any meritorious basis for such an action, suit, proceeding, inquiry or investigation) at the date of this Official Statement to restrain or enjoin the issuance, sale, execution or delivery of the Series 2013 Bonds or any proceedings of the Issuer taken with respect thereto, or wherein an unfavorable decision, ruling or finding (i) would adversely affect the transactions contemplated by this Official Statement or the validity or enforceability of the Series 2013 Bonds, the Indenture or any other agreement or instrument that is used or contemplated for use in the consummation of the transactions contemplated by this Official Statement or (ii) would materially adversely affect the financial condition or operations of the Projects. There is no litigation now pending or threatened against the Issuer, of which the Issuer has knowledge, that in any manner questions the right of the Issuer to enter into or perform its obligations under the Indenture, the Deed of Trust or the Tax Certificate.

TAX EXEMPTION

Federal Law

In the opinion of Ballard Spahr LLP, Bond Counsel, interest on the Series 2013 Bonds is excludable from gross income for purposes of federal income tax under existing laws as enacted and construed on the date of initial delivery of the Series 2013 Bonds, assuming the accuracy of the certifications of the Issuer and continuing compliance by the Issuer with the requirements of the Internal Revenue Code of 1986, as amended (the “Code”). Interest on the Series 2013 Bonds is not an item of tax preference for purposes of either individual or corporate federal alternative minimum tax; however, interest on Series 2013 Bonds held by a corporation (other than an S corporation, regulated investment company, or real estate investment trust) may be indirectly subject to federal alternative minimum tax because of its inclusion in the adjusted current earnings of a corporate holder. Bond Counsel expresses no opinion regarding other federal tax consequences of ownership or disposition of or the accrual or receipt of interest on the Series 2013 Bonds.

Each maturity of the Series 2013 Bonds is offered at a premium (“original issue premium”) over its principal amount. For federal income tax purposes, original issue premium is amortizable periodically over the term of a Series 2013 Bond through reductions in the holder’s tax basis for the Series 2013 Bond for determining taxable gain or loss from sale or from redemption prior to maturity. Amortization of premium does not create a deductible expense or loss. Holders should consult their tax advisers for an explanation of the amortization rules.

State of Maryland Law

By the terms of the Act, the Series 2013 Bonds, including the interest on the Series 2013 Bonds, are forever exempt from all Maryland state and local taxes.

Changes in Federal and State Tax Law

From time to time, there are Presidential proposals, proposals of various federal committees, and legislative proposals in the Congress and in the states that, if enacted, could alter or amend the federal and state tax matters referred to herein or adversely affect the marketability or market value of the Series 2013 Bonds or otherwise prevent holders of the Series 2013 Bonds from realizing the full benefit of the tax exemption of interest on the Series 2013 Bonds. Further, such proposals may impact the marketability or market value of the Series 2013 Bonds simply by being proposed. It cannot be predicted whether or in what form any such proposal might be enacted or whether if enacted it would apply to bonds issued prior to enactment. In addition, regulatory actions are from time to time announced or proposed and litigation is threatened or commenced which, if implemented or concluded in a particular manner, could adversely affect the market value, marketability or tax status of the Series 2013 Bonds. It

38

cannot be predicted whether any such regulatory action will be implemented, how any particular litigation or judicial action will be resolved, or whether the Series 2013 Bonds would be impacted thereby.

Purchasers of the Series 2013 Bonds should consult their tax advisors regarding any pending or proposed legislation, regulatory initiatives or litigation. The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of issuance and delivery of the Series 2013 Bonds, and Bond Counsel has expressed no opinion as of any date subsequent thereto or with respect to any proposed or pending legislation, regulatory initiatives or litigation.

The proposed form of Bond Counsel’s approving opinion is attached hereto as Appendix C.

UNDERWRITING

RBC Capital Markets, LLC (the “Underwriter”) will enter into a Bond Purchase Agreement with the Issuer to purchase the Series 2013 Bonds at a purchase price of $13,805,960.85 (representing the principal amount of the Series 2013 Bonds less an Underwriter’s discount of $50,184.75 plus original issue premium of $1,151,145.60). The Underwriter is obligated to purchase all of the Series 2013 Bonds if any are purchased. The obligation of the Underwriter to purchase the Series 2013 Bonds will be subject to various conditions contained in the Bond Purchase Agreement, including the receipt of a rating on the Series 2013 Bonds of at least “Baa3” from Moody’s Investors Service, Inc.

The Underwriter is purchasing the Series 2013 Bonds and intends to offer the Series 2013 Bonds to the original purchasers thereof at the offering prices set forth on the cover page of this Official Statement, which offering price may subsequently be changed without any requirement of prior notice. The Underwriter has reserved the right to permit other securities dealers who are members of the Financial Industry Regulatory Authority to assist in selling the Series 2013 Bonds. The Underwriter may offer and sell Series 2013 Bonds to certain dealers at prices lower than the public offering price or otherwise allow concessions to such dealers who may re-allow concessions to other dealers. Any discounts and/or commissions that may be received by such dealers in connection with the sale of the Series 2013 Bonds will be deducted from the Underwriter’s discount.

The Issuer has agreed to indemnify the Underwriter (solely from the Trust Estate) against certain civil liabilities, including certain liabilities under federal securities laws. Under existing statutes, regulations, and court decisions, the enforceability of such an agreement to indemnify is uncertain.

RATING

The Series 2013 Bonds have been assigned a rating of “Baa3” by Moody’s Investors Service, Inc. (“Moody’s). An explanation of the significance of such rating may be obtained from Moody’s. The rating reflects only the view of Moody’s, and neither the Issuer nor the Ground Lessor nor the System nor the University nor the Underwriter makes any representation as to the appropriateness of such rating.

There is no assurance that such rating will continue for any given period of time or that it will not be revised downward or withdrawn entirely by Moody’s, if in the judgment of Moody’s, circumstances warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Series 2013 Bonds.

INDEPENDENT ACCOUNTANTS

The financial statements for the Phase I Project included in Appendix A-1, Appendix A-2 and Appendix A-3 to this Official Statement have been audited by Dixon Hughes Goodman LLP, independent certified public accountants (“DHG”), to the extent and for the periods indicated in their reports thereon.

The financial statements for the Phase II Project included in Appendix A-4 to this Official Statement have been audited by Stout, Causey & Horning, P.A., independent certified public accountants (“Stout Causey”), to the extent and for the periods indicated in their report thereon.

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INTERIM FINANCIAL STATEMENTS

The combined unaudited interim financial statements for the Phase I Project and the Phase II Project included in Appendix A-5 to this Official Statement have been prepared by the Issuer based on information provided by the Manager as of and for the period ended March 31, 2013. Neither Stout Causey nor DHG has audited such interim financial statements. The Manager has made such adjustments as it deems necessary so that such interim financial information is stated on a basis substantially consistent with that of the audited financial statements.

Operating results for such interim period are not necessarily indicative of the results that may be expected for the full fiscal year or for any other interim period.

FINANCIAL ADVISORS

Wye River Group, Incorporated, Annapolis, Maryland, is serving as financial advisor to the Issuer in connection with the issuance of the Series 2013 Bonds.

Public Financial Management, Inc., Boston, Massachusetts, is serving as financial advisor to the System in connection with the issuance of the Series 2013 Bonds.

RELATIONSHIP OF PARTIES

In the ordinary course of business, the Underwriter, its parent company and certain of their affiliates may from time to time provide other investment banking services, commercial banking services or financial products to the Issuer, the System and the University.

LEGAL MATTERS

Certain legal matters pertaining to the Issuer and its authorization and issuance of the Series 2013 Bonds are subject to the approving opinion of Ballard Spahr LLP, Baltimore, Maryland, the form of which is included as Appendix C hereto. Certain legal matters will be passed on for the Underwriter by its counsel, Miles & Stockbridge P.C.

CONTINUING DISCLOSURE

The Issuer has determined that no financial or operating data concerning the Issuer is material to any decision to purchase, hold or sell the Series 2013 Bonds, and the Issuer will not provide any such information. The Issuer has undertaken all responsibilities for any continuing disclosure required by the Rule (as described below) with respect to the Property to Bondholders as described below, and the Issuer shall have no liability to Bondholders or any other person with respect to such disclosure, other than as described below. During the past five years, the Issuer inadvertently omitted certain operating data required to be filed quarterly and annually as part of its filings under nine of its existing continuing disclosure agreements in accordance with the Rule. The Issuer has made supplemental filings to provide all such material omitted information and has implemented procedures to prevent further omissions. The Issuer has not otherwise failed to comply, in any material respect, with its previous disclosure undertakings.

The Issuer will undertake in a Continuing Disclosure Agreement (the “Continuing Disclosure Agreement”) among the Issuer, Manufacturers and Traders Trust Company, as Trustee, and Manufacturers and Traders Trust Company, as dissemination agent, to comply with the provisions of Rule 15c2-12 (the “Rule”), promulgated by the Securities and Exchange Commission (the “SEC”), by providing certain annual financial information and operating data with respect to the Projects and event notices required by the Rule. Such information is to be filed with the Municipal Securities Rulemaking Board (the “MSRB”) through the Electronic Municipal Market Access System (EMMA). Such undertaking requires the Issuer to provide only limited information at specified times. See “PROPOSED FORM OF CONTINUING DISCLOSURE AGREEMENT” in Appendix D hereto.

40

Investors and other interested parties may contact the MSRB for additional information concerning its services.

In the event of any failure of the Issuer to provide the required continuing disclosure with respect to the Property, any Bondholder may bring an action seeking specific performance of the Issuer’s obligations to provide continuing disclosure. No assurance can be given as to the outcome of any such proceeding.

Failure by the Issuer to comply with the continuing disclosure obligations in the Continuing Disclosure Agreement will not be an “Event of Default” under the Indenture or the Deed of Trust, and the sole and exclusive remedy for such failure shall be an action brought by or on behalf of the holders of the Series 2013 Bonds to compel specific performance of the Issuer’s continuing disclosure obligations, as described above.

The proposed form of Continuing Disclosure Agreement is attached hereto as Appendix D.

MISCELLANEOUS

The Issuer has furnished only the information contained in this Official Statement relating to itself. The Underwriter has furnished the information contained in this Official Statement under the heading “UNDERWRITING” and has furnished the information with respect to the public offering prices of the Series 2013 Bonds contained on the cover page of this Official Statement.

The Trustee has neither reviewed nor participated in the preparation of this Official Statement.

Any statements made in this Official Statement involving estimates or matters of opinion, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of the estimates or matters of opinion will be realized. Neither this Official Statement nor any statement that may have been made orally or in writing is to be construed as a contract with the owners of the Series 2013 Bonds.

The Issuer has duly authorized the use and delivery of this Official Statement in connection with the offering of the Series 2013 Bonds.

Appendix A-1

ANNUAL AUDITED FINANCIAL STATEMENTS OF THE PHASE I PROJECT FOR THE FISCAL YEARS ENDED JUNE 30, 2011 AND JUNE 30, 2010

Appendix A-2

AUDITED FINANCIAL STATEMENTS OF THE PHASE I PROJECT FOR THE TEN-MONTH PERIOD ENDED APRIL 30, 2012

Appendix A-3

AUDITED STATEMENT OF REVENUES AND EXPENSES OF THE PHASE I PROJECT FOR THE FISCAL YEAR ENDED JUNE 30, 2012

Salisbury University Project

Audited Statement ofRevenues and Expenses

For the Year Ended June 30, 2012


Index


Independent Auditors' Report , Page 3

Statement of Revenues and Expenses : 4

Notes to Financial Statement 5

2

6i)...,.,DIXON HUGHES GOODMANu,

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Independent Auditors' Report

Maryland Economic Development CorporationSalisbury University Project

We have audited the accompanying statement of revenue and expenses (the "financial statement") ofSalisbury University Project (the "Project") for the year ended June 30, 2012. This financial statement isthe responsibility of the Project's management. Our responsibility is to express an opinion on thefinancial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statement is free ofmaterial misstatement. An audit includes consideration ofintemal control over financial reporting as a basis for designing audit procedures that are appropriate inthe circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Project'sintemal control over financial reporting. Accordingly, we express no such opinion. An audit alsoincludes examining, on a test basis, evidence supporting the amounts and disclosures in the financialstatement, assessing the accounting principles used and significant estimates made by management, aswell as evaluating the overall financial statement presentation. We believe that our audit provides areasonable basis for our opinion.

In our opinion, the financial statement referred to above present fairly, in all material respects, therevenues and expenses of Salisbury University Project for the year ended June 30, 2012, in conformitywith accounting principles generally accepted in the United States of America.

October 19, 2012

3

Praxity':M/I,W R •

999 S Shady Grave Road. SUIte 400. MemphiS. TN 38120 I T 901 7613000 I F 901.7619667 I dhgllp_com


Statement ofRevenues and Expenses


RevenuesRent $ 3,855,570Interest income 90,911Other income 143,629

Total revenues 4,090,110

ExpensesGeneral and administrative 1,423,701Ground lease 983,728Depreciation and amortization 564,984Interest 896,275

Total expenses 3,868,688

Revenues over expenses $ 221,422

See accompanying notes to financial statement. 4


Notes to Financial Statement


1. Summary of Significant Accounting Policies

Organization

Salisbury University Project (the "Project"), an operating division ofCollegiate Housing Foundation (the"Foundation"), consists of a student housing facility with 576 revenue producing bedrooms plus 2dedicated staff bedrooms on the campus of Salisbury University (the "University") in the town ofSalisbury, Maryland. The Project is operated under a Student Housing Management Agreement withEdR Management, Inc. (the "Manager"). The accompanying statement includes only the accounts oftheProject.

The Foundation is a non-profit corporation formed in 1996 under the laws ofthe State ofAlabama and isexempt from Federal income tax pursuant to Section 501(c)(3) of the Internal Revenue Code. TheFoundation was organized and is operated for the purpose ofproviding housing facilities primarily forstudents at colleges and universities in the United States of America.

The Maryland Economic Development Corporation (the "Issuer") issued $18,520,000 in revenue bondswhich are payable solely from the revenues of the Project. The proceeds of the Series 1999 Bond wereloaned to the Project pursuant to a Loan Agreement dated as ofJune 1, 1999, between the Issuer and theFoundation.

Basis of Presentation

The financial statement is prepared in accordance with the American Institute of Certified PublicAccountants Audit and Accounting Guide, Not-far-Profit Entities, which is in conformity withaccounting principles generally accepted in the United States of America.

Use of Estimates

The process of preparing the financial statement in confonnity with accounting principles generallyaccepted in the United States ofAmerica requires management to make estimates and assumptions thataffect the reported amounts ofrevenues and expenses during the reporting period. Actual results coulddiffer from those estimates; however, in the opinion of management, such differences will not bematerial to the financial statement.

Advertising

Advertising costs are expensed as incuned and totaled approximately $31,000 for the year ended June30,2012.

5

1. Summary of Significant Accounting Policies (continued)

Revenue Recognition

The Project generally leases apartment units based on annual lease agreements. Tenants are billed on thefirst of the month for that month's portion of the lease and revenue is recognized using the straight-linemethod. Service and application fees are deferred and recognized over the term of the lease. It is notuncommon for tenants to pay rent in advance. These amounts are recognized as income over the term ofthe lease.

Prepaid Lease Expense

The Project acquired an option to purchase land which was simultaneously conveyed to the University.The University in turn leased the property to the Project under a ground lease. The option also includeda clause whereby the University could purchase the Project. The purchase price for the Project would bethe amount necessary to pay off the debt of the Project. The cost of this option was $1,523,244 and isbeing amortized over the term of the ground lease. The amount charged to expense was approximately$39,000 for the year ended June 30, 2012.

Property and Equipment

The Project capitalizes additions ofproperty and equipment with a cost of $1 ,000 orgreater and a usefullife of at least 3 years. Property and equipment is recorded at cost and is depreciated over the estimateduseful life of the respective asset. Depreciation is computed using the straight-line method withestimated useful lives offorty years for buildings and three to seven years for furniture and equipment.

Property and equipment is comprised of the following at June 30, 2012:

BuildingsFurniture and equipmentComputer equipment

Accumulated depreciation

$

$

13,798,1661,664,561

9,88615,472,613(5,609,199)9.863.414

Depreciation expense was approximately $507,000 for the year ended June 30, 2012.

Debt Issuance Costs

Costs incurred in connection with issuance of the Project's bonds are amortized over the lives of theassociated bonds. Amortization expense was $12,900 for the year ended June 30, 2012;

6

1. Summary of Significant Accounting Policies (continued)

Income Taxes

The Project qualifies as a non-profit organization exempt from federal income taxes under Section50l(c)(3) ofthe Internal Revenue Code based upon its determination letter dated September 24, 1997. Inaddition, the Project received a determination letter dated April 19, 2001, indicating they satisfied thenecessary requirements for the advance ruling period that ended December 31, 2000, and the Proj ect isnot a private foundation within the meaning of Section 509(a) of the Internal Revenue Code.

Accordingly, the accompanying financial statement does not reflect a provision for federal and stateincome taxes. The Project has determined that it does not have any material unrecognized tax benefits orobligations as of June 30, 2012, with respect to the Project and its operations. Tax years ending afterJune 30, 2009, are still subject to income tax examination.

Subsequent Events

The Company evaluated the effect subsequent events would have on the financial statements throughOctober 19,2012, which is the date the fmancial statements were available to be issued. See Note 6.

2. Concentrations of Risk

The Project maintains cash balances with financial institutions located in several states. Periodically, theProject maintains deposits in excess of federally insured limits. The Project could incur additionalexpense related to uninsured cash deposits should a bank unexpectedly liquidate.

The Project's financial stability is dependent upon the University's student population.

3. Ground Lease Expense

The gromld lease between the Project (the "Lessee") and the University (the "Lessor") requires theLessee to pay rent to the Board of Trustees of the Lessor for the term begiill1ing June 29, 1999, throughJune 29, 2039, based on a formula provided in the lease agreement. In addition to the base rent, theLessee shall pay directly, or reimburse the Lessor upon written notice for, all real estate, personalproperty and other taxes, special assessments, insurance premimns and other charges, cost and expenses.

Ground lease expense was $983,728 for the year ended June 30, 2012. The liability of the Lessee withrespect to its obligations under the ground lease shall be non-recourse and the satisfaction of any oftheLessee's obligations shall be limited to the Lessee's interest in the property.

4. Bonds Payable

Certain series of taxable and tax-exempt bonds (the "Bonds") were issued by the Issuer as registeredbonds pursuant to the Indenture between the Issuer and M&T Investment Group (the "Trustee") tofinance the construction ofthe Project, fund interest on the bonds during the construction period, fund aDebt Service Reserve Fund, and pay the cost of issuing the bonds.

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4. Bonds Payable (continued)

Repayment of the bonds is secured pursuant to various security agreements, assignments and othercollateral instruments.

The Issuer and the. Trustee agree that the Foundation will have no liability under the various agreementsdelivered in connection with the issuance of the Bonds beyond its interest in the Project.

Long-term debt consists of the following at June 30, 2012:

Tax-exempt term bonds payable dated June 29,1999;due at various intervals through June 1, 2030;interest is payable in semi-annual installments;principal is payable in annual installments whichcommenced June 1,2001; average coupon rate of6.00%; secured by various collateral instrnments

Less unamortized discount on tax exempt bonds payable

$ 14,530,000

(163,219)$ 14,366.781

The Bonds were issued at a $215,244 discount, which is being amortized over the life ofthe Bonds usingthe effective interest method. The amount charged to expense was approximately $5,600 for the yearended June 30, 2012.

On July 26,2012, the bonds were paid off. See Note 6,

S. Related Party Transactions

The management and daily operations ofthe Proj ect are conducted by the Manager. The management ofthe Project includes collection ofrents, payment of indebtedness and expenses, repairs, maintenance andadministrative services. All employees that manage the Project are under the control and supervision ofthe Manager.

Generally, managementfees are calculated based upon a defined formula in the management agreementnot to exceed 5% of gross revenues on a monthly basis. Management fees for the year ended June 30,2012 were approximately $169,000,

The Proj ect has an agreement to pay an annual commitment fee to the Foundation. The amount is equalto .8% ofthe adjusted gross revenues, For the year ended June 30, 2012, the commitment fee expensewas approximately $32,000.

8

6. Subsequent Event

In a letter dated May 14,2012, notification was given by the University of its intentto exercise its optionto purchase the Project. The University arranged financing to purchase the Project by issuing MarylandEconomic Development Corporation ("MEDCO") student housing revenue bonds. MEDCO issued thesebonds to purchase the Project for the use of the University System of Maryland on behalf of itsconstituent institution, the University. The sale was completed on July 26,2012, and as such, the priorloan covenant calculation was deferred to the fiscal year ending after the issuance of the bonds.Therefore, the next calculation of the loan covenant is not due until June 30, 2013. The structure of thenew bond agreement calls for principal payments from $585,000 to $760,000 annually from June 1,2013through June 1,2022, for the $6,600,000 of Serial Bonds. Interest is between 2% and 4% per annum anddue annually. The $7,570,000 of Term Bonds is due in the amounts of $4,385,000 on June 1,2027 and$3,185,000 on June 1, 2030. The bond agreement calls for sinking fund payments from $795,000 to$1,115,000 annually from June 1,2023 through June 1,2030. Interest is 5% and due annually on June 1.

9

Appendix A-4

ANNUAL AUDITED FINANCIAL STATEMENTS OF THE PHASE II PROJECT FOR THE FISCAL YEARS ENDED JUNE 30, 2012 AND JUNE 30, 2011

Appendix A-5

UNAUDITED INTERIM FINANCIAL STATEMENTS OF THE PROJECTS FOR THE NINE-MONTH PERIOD ENDED MARCH 31, 2013

UNIVERSITY PARKAT SALISBURY UNIVERSITY,

A PROJECT OF MEDCO

Balance SheetsAs of March 31, 2013

Assets

Current Assets:Cash and cash equivalents 628,821$ Deposits with bond trustee – restricted 1,391,862Accounts receivable, net of allowance for doubtful accounts 753Interest receivable 1,317Prepaid expenses and other assets 4,515

Total Current Assets 2,027,268

Non-current Assets:Deposits with bond trustee – restricted 4,899,194Prepaid expenses 3,533Capital assets:

Buildings and improvements 22,527,149Furnishings and equipment 2,789,949

25,317,098 Less: accumulated depreciation 5,848,672

Net Capital Assets 19,468,426

Deferred financing costs, net of accumulated amortization 610,490Prepaid issuer's fee 57,661

Total Non-current Assets 25,039,304

Total Assets 27,066,572$

Liabilities and Net Deficit

Current Liabilities:Accounts payable and other accrued expenses 226,374$ Accrued interest 428,383Rents and fees collected in advance 1,065,560Accrued ground rent 174,260Current portion of bonds payable 960,000

Total Current Liabilities 2,854,577

Non-current Liabilities:Bonds payable, net of current portion 27,547,822

Total Liabilities 30,402,399

Commitments

Net Deficit:Invested in capital assets, net of related debt (8,504,779) Restricted under trust indenture 5,168,952

Total Net Deficit (3,335,827)

Total Liabilities and Net Deficit 27,066,572$

UNIVERSITY PARKAT SALISBURY UNIVERSITY,

A PROJECT OF MEDCO

Statements of Revenues, Expenses, and Changes in Net DeficitFor the Period Ended March 31, 2013

Operating Revenues:Apartment rentals 4,645,078$ Other 80,231

Total Operating Revenues 4,725,309

Operating Expenses:Property operating costs 1,103,071Management and service fees 222,929Administrative and general 236,981Sales and marketing 55,859Ground rent 1,633,859Depreciation 891,875

Total Operating Expenses 4,144,574

Operating Income 580,735

Non-operating Revenues (Expenses):Interest income 34,779Interest expense (969,738)

Total Non-operating Expenses, net (934,959)

Increase in Net Deficit (354,224)

Net Deficit, beginning of year (2,981,603)

Net Deficit, as of March 31, 2013 (3,335,827)$

Appendix B

DEFINITIONS OF CERTAIN TERMS AND SUMMARIES OF PRINCIPAL LEGAL DOCUMENTS

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TABLE OF CONTENTS Page

DEFINITIONS OF CERTAIN TERMS ....................................................................................................................................... 1 SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE ....................................................................................... 16

Creation of Funds and Accounts ..................................................................................................................................... 16 Issuance Cost Fund ......................................................................................................................................................... 16 Deposit of Revenues; Deposit of Certain Proceeds ......................................................................................................... 16 Debt Service Fund; Application of Moneys .................................................................................................................... 17 Use of Moneys in Certain Funds to Pay Debt Service on Bonds; Debt Service Reserve Fund ....................................... 18 Management Fees Fund .................................................................................................................................................. 18 Redemption Fund ............................................................................................................................................................ 19 Insurance and Condemnation Award Fund ..................................................................................................................... 19 Investment of Moneys; Application of Earnings ............................................................................................................. 20 Rebate Fund; Monitoring and Payment of Rebate Amount ............................................................................................ 21 Compliance with Applicable Governmental Standards and Requirements ..................................................................... 22 Amendment of the Project and Additional Projects ........................................................................................................ 22 Operation and Maintenance of Property; Expenses of Upkeep ....................................................................................... 23 Subordination of Leases and Contracts ........................................................................................................................... 23 Limitations on Alteration of Property; Disposition of Equipment Collateral .................................................................. 23 Required Insurance; Independent Insurance Consultant ................................................................................................. 23 Application of Proceeds of Condemnation and Insurance; Extraordinary Redemption of Bonds ................................... 24 Partial Release of Liens ................................................................................................................................................... 24 Release of Phase I Project; Release of Phase II Project .................................................................................................. 25 Preservation of Qualifications ......................................................................................................................................... 25 Annual Audit of Issuer; Quarterly Financial Reports ...................................................................................................... 25 Issuer to Pay Impositions and Maintain Tax Exemptions ............................................................................................... 25 Liens and Encumbrances; Further Assurances by Issuer ................................................................................................ 25 Issuer to Prepare Budget ................................................................................................................................................. 25 Management .................................................................................................................................................................... 26 Management Consultant ................................................................................................................................................. 27 Permitted Indebtedness ................................................................................................................................................... 27 Authorization of Additional Bonds ................................................................................................................................. 27 Registration and Exchange of Bonds .............................................................................................................................. 28 Modification or Amendment of the Indenture and Deed of Trust ................................................................................... 28 Events of Default and Remedies ..................................................................................................................................... 30 Defeasance; Unclaimed Moneys ..................................................................................................................................... 35 No Recourse on Bonds .................................................................................................................................................... 36 Responsibilities of Trustee; Trustee Entitled to Indemnity ............................................................................................. 36 Trustee Protected in Relying on Certain Documents ...................................................................................................... 36 Action by Trustee ............................................................................................................................................................ 37 Standard of Care ............................................................................................................................................................. 37 Permitted Acts ................................................................................................................................................................. 37 Resignation of the Trustee .............................................................................................................................................. 37 Removal of Trustee ......................................................................................................................................................... 37 Successor Trustee............................................................................................................................................................ 38 Merger, Conversion or Consolidation of Trustee ............................................................................................................ 38 Notice of Events of Default............................................................................................................................................. 38 Exercise of Issuer’s Rights .............................................................................................................................................. 38 No Liability for Clean-up of Hazardous Materials .......................................................................................................... 39 Issuer Protected in Acting in Good Faith ........................................................................................................................ 39 Moneys and Funds Held for Particular Bonds ................................................................................................................ 40 All Obligations of Issuer Limited; Non-Recourse ........................................................................................................... 40

SUMMARY OF CERTAIN PROVISIONS OF THE DEED OF TRUST ............................................................................... 41 Property Subject to the Deed of Trust ............................................................................................................................. 41 Transfer of Property ........................................................................................................................................................ 42 Easements, Restrictive Covenants, Zoning; Release of Liens ......................................................................................... 42 Events of Default and Remedies ..................................................................................................................................... 43 Security Agreement ........................................................................................................................................................ 43

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DEFINITIONS OF CERTAIN TERMS

In addition to terms defined elsewhere in this Official Statement, the following are definitions of certain terms contained in this Official Statement. Terms used but not defined herein shall have the meanings set forth in the Indenture and the Deed of Trust.

“Act” means Section 10-101 through 10-132, inclusive, of the Economic Development Article of the Annotated Code of Maryland and all future acts supplemental thereto or amendatory thereof.

“Additional Bonds” means Indebtedness of the Issuer issued under and pursuant to the Indenture.

“Additional Projects” means any improvement, addition or betterment to, or any construction, replacement, remodeling or equipping of, the Property that is financed or refinanced pursuant to the Act and the Indenture by the Issuer by the issuance of Additional Bonds, including (without limitation) land, easements, rights-of-way, leaseholds and other interests in real property.

“Administrative Expenditures” means (a) any fees and expenses of the Trustee (whether as Trustee, Paying Agent or Registrar for the Bonds), (b) expenses of the Individual Trustees, (c) any fees and expenses of the Dissemination Agent, (d) fees and expenses of any Rating Agency maintaining a rating on the Bonds, (e) funds for the payment of the Rebate Amount (including any Rebate Analyst Fees which may be due), (f) all expenses of the Issuer (including reasonable attorney’s fees) in connection with (i) the preparation of financial statements of the Issuer that include the Property, (ii) the calculation of the Rebate Amount, (iii) preparation of any reports or submissions required by the Continuing Disclosure Agreement, (iv) any audit by the Internal Revenue Service relating to the Bonds or the Property, (v) any claims relating to the Property, (vi) the enforcement of any contracts with respect to the Property, (vii) any dispute between the Issuer and the Developer, the Manager, the Ground Lessor, the State, the System, the University or any other party whatsoever, and (viii) any other matters the cost of which are properly or customarily charged by conduit issuers of bonds for the administration thereof, including, without limitation, the payment of any fees to a Management Consultant and the payment of premiums for any insurance that the Issuer is required, either by the Indenture or the Ground Lease, to maintain, (g) fees of the Individual Trustees to the extent that they are not full-time employees of the Trustee, including, without limitation, legal, financing and administrative expenses and (h) expenses incurred by the Trustee to compel full and punctual performance of the provisions of the Indenture and the Deed of Trust in accordance with their respective terms.

“Arbitrage Compliance Agreement” means with respect to the Series 2013 Bonds, the letter agreement by and between the Issuer and the Rebate Analyst, as amended or supplemented from time to time.

“Authorized Baltimore Newspaper” means a daily newspaper printed in the English language and having a general circulation in the Baltimore metropolitan area.

“Authorized Denomination” means (i) with respect to the Series 2012 Bonds and the Series 2013 Bonds, $5,000 and any integral multiple thereof, and (ii) with respect to any other Additional Bonds, the amount set forth as the authorized denomination thereafter in any Supplemental Indenture authorizing the issuance of such Additional Bonds.

“Authorized New York Newspaper” means a daily newspaper printed in the English language and having a general circulation in the Borough of Manhattan, City and State of New York, or a financial journal printed in the English language and having a general circulation in the Borough of Manhattan, City and State of New York.

“Authorized Officer of the Issuer” means the Chairman or Vice Chairman of the Board or the Executive Director of the Issuer or any other person at the time designated to act on behalf of the Issuer by a certificate signed by the Chairman or Vice Chairman of the Board or the Executive Director of the Issuer and delivered to the Trustee.

“Balloon Long-Term Indebtedness” means Long-Term Indebtedness 25% or more of the principal amount of which matures in the same 12-month period, which portion of such principal amount is not required by the documents governing such Long-Term Indebtedness to be amortized by redemption prior to such period. Optional Tender Indebtedness shall not be deemed to constitute Balloon Long-Term Indebtedness solely by reason of the option of the holder thereof to require the redemption or purchase thereof or any required purchase or redemption thereof in connection with any termination of any Liquidity Facility securing such Optional Tender Indebtedness prior to the stated maturity thereof.

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“Beneficiary” means the Trustee.

“Board” means the Board of Directors of the Issuer.

“Bond” or “Bonds” means the Series 2012 Bonds, the Series 2013 Bonds and any other Additional Bonds, collectively.

“Bond Counsel” means Ballard Spahr LLP, or any other law firm approved by the Issuer having a national reputation in the field of municipal law, whose legal opinions are generally accepted by purchasers of municipal bonds.

“Bond Documents” means the Series 2012 Bonds, the Series 2013 Bonds, any other Additional Bonds, the Indenture, the Deed of Trust, the Ground Lease, the Management Agreement, the Issuer’s Tax Certificate, the Arbitrage Compliance Agreement, and any and all other documents executed in connection with the Bonds or the Property, together with any and all Supplements thereto.

“Bond Year” means a period of 12 consecutive months beginning on July 1 in any calendar year in which Bonds are Outstanding and ending on June 30 of the following calendar year.

“Book-Entry Form” or “Book-Entry System” means a form or system, as applicable, under which (i) the ownership of beneficial interests in a Series of Bonds may be transferred only through a book-entry and (ii) physical bond certificates in fully registered form are registered only in the name of a Depository or its nominee as holder, with the physical bond certificates “immobilized” in the custody of the Depository or the Trustee on behalf of the Depository.

“Bondholder” or “Holder” or “holder” or “Owner” or “owner” or “Bondowner” or any similar term means the registered owner of a Bond.

“Budget” means the annual budget required to be prepared by the Issuer as described below under “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Issuer to Prepare Budget.”

“Business Day” means any day other than a Saturday, Sunday or legal holiday observed as such by the Trustee or the Issuer or both.

“Capital and Furnishings Fund” means the fund by that name established under the Indenture.

“Capital and Furnishings Fund Requirement” means $250.00 per bed, such amount to be increased annually beginning on the first day of each Fiscal Year beginning July 1, 2013 by the greater of (i) 3%, or (ii) the amount recommended by an Independent Engineer or Independent Architect in accordance with the Indenture, in any case as certified by the Issuer to the Trustee in writing.

“Capital Improvements” means any Additional Projects or any capital project (other than the Project) in connection with the Property undertaken by the Issuer.

“Capitalized Interest Account” means the account by the name created under the Indenture.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor federal income tax statute or code, and the applicable regulations thereunder.

“Completion Certificate” means the certificate of the Issuer certifying to the completion of the Project or any Additional Project.

“Completion Date” means, when used with respect to the Project or any Additional Project, any date on which a Completion Certificate is filed with the Trustee certifying the completion of the acquisition of the Project or such Additional Project.

“Condemnation Award” has the meaning given to that term in “SUMMARY OF CERTAIN PROVISIONS OF THE DEED OF TRUST – Property Subject to the Deed of Trust.”

“Contingency Allowance Account” means the account by that name established under the Indenture.

B-3

“Continuing Disclosure Agreement” means, with respect to the Series 2013 Bonds, the Continuing Disclosure Agreement dated as of June 1, 2013 by and among the Issuer, the Dissemination Agent and the Trustee, together with any and all Supplements thereto.

“Corporate Trust Office” means (1) for purposes of registration, transfer, exchange or payment of Bonds, the principal office of the Trustee at which any time its corporate trust business shall be administered, which office on the 2013 Closing Date is located at c/o M&T Bank, Corporate Trust Operations (8th Floor), One M&T Plaza, Buffalo, NY 14203, and (2) for purposes of communications with the Trustee, the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office on the 2013 Closing Date is located at 25 S. Charles Street, 11th Floor, Baltimore, Maryland 21201, Attention: Corporate Trust Administration, or (3) in either case, such other address as the Trustee may designate from time to time by notice under the Indenture, or the principal corporate trust office of any successor Trustee (or such other address as a successor Trustee may designate from time to time by notice under the Indenture).

“Costs” or “costs” means the costs of construction and improvements (including any change orders as described in the Indenture) and acquisition of all lands, structures, property (real or personal), rights, rights-of-way, franchises, easements and interests acquired by the Issuer for the Project or any Additional Projects; the cost of demolishing or removing any buildings or structures on land so acquired; the cost of all labor, materials, machinery, equipment, fixtures, furnishings and furniture, financing charges, interest prior to and during construction and for such a limited period after completion of such construction as the Principal Underwriters deem advisable; interest and reserves for principal and interest and for operations, extensions, enlargements, additions, improvements and betterments; the cost of architectural, engineering, financial and legal services, plans, specifications, studies, surveys, estimates of costs and of revenues, and administrative expenses necessary or incidental to determining the feasibility or practicability of constructing the Project or any Additional Projects; any fees and expenses of the Trustee, the Paying Agent, the Registrar or Dissemination Agent due and payable on or before the Completion Date, the Issuer’s Annual Fee due and payable on or before the Completion Date and such other expenses as may be necessary or incidental to the acquisition, construction, furnishing and equipping of the Project or any Additional Projects (including, without limitation, the cost of any insurance and the cost to compel full and punctual performance of any contract relating thereto), the financing or refinancing of such construction, furnishing, equipping and acquisition and the cost of the placing of the Project or any Additional Projects in operation, including any working capital and marketing costs.

“Coverage Ratio” means, when used with respect to any particular Fiscal Year, the quotient obtained by dividing (i) the Net Income Available for Debt Service for such Fiscal Year by (ii) the Maximum Annual Debt Service on all Long-Term Indebtedness outstanding as of the last day of such Fiscal Year; provided, however, that in any calculation of the Maximum Annual Debt Service for any Fiscal Year there shall be excluded any amounts irrevocably deposited in trust for the payment of interest on any Long-Term Indebtedness.

“Credit Facility” means any Liquidity Facility, letter of credit, bond insurance policy, bond purchase agreement, guaranty, line of credit, surety bond or similar credit or liquidity facility securing any Bond.

“Credit Facility Agreement” means the agreement pursuant to which any Credit Facility is issued, together with any and all Supplements thereto.

“Credit Facility Provider” means the issuer of any Credit Facility then in effect.

“Debt Service Requirements” means, when used with respect to any Bonds for any Fiscal Year or Bond Year (as the case may be), as of any particular date of calculation, the amount required to pay the sum of (a) the interest on such Bonds payable during the period from the second day of such Fiscal Year or Bond Year (as the case may be) through the first day of the immediately succeeding Fiscal Year or Bond Year (as the case may be), and (b) the principal of, the Sinking Fund Installment for and any other amount required to effect any mandatory redemption or prepayment of such Bonds, if any, during the period from the second day of such Fiscal Year or Bond Year (as the case may be) through the first day of the immediately succeeding Fiscal Year or Bond Year (as the case may be), less any amount of such interest or principal for the payment of which moneys, Investment Obligations, the principal of and interest on which when due will provide for such payment, are irrevocably held in trust, including (without limitation) any accrued interest and capitalized interest on deposit in the Interest Account. With respect to any other Long-Term Indebtedness, “Debt Service Requirement” means with reference to a specific period, (i) interest accruing on such Long-Term Indebtedness during the period, except to the extent such interest is payable from the

B-4

proceeds of such Long-Term Indebtedness or other Long-Term Indebtedness, (ii) amounts required to be paid during the period with respect to the principal or sinking fund requirements on such Long-Term Indebtedness and (iii) all lease rental payments during the period on Long-Term Indebtedness which evidences the acquisition of capital assets which is required to be capitalized under generally accepted accounting principles.

For the purpose of calculating the Debt Service Requirements:

(i) with respect to any Variable Rate Indebtedness:

(A) for the purpose of calculating the Debt Service Reserve Fund Requirement and the principal amount of Balloon Long-Term Indebtedness constituting Variable Rate Indebtedness payable in any Fiscal Year or Bond Year described in clause (ii)(D) below, such Indebtedness shall be deemed to bear interest at the fixed rate that it would have borne had it been issued at a fixed rate for the term thereof, as evidenced by a certificate of an Authorized Officer of the Issuer and a certificate of an investment banking firm or financial advisor knowledgeable in financial matters relating to the Issuer and the Property confirming such interest rate assumption as reasonable; and

(B) for all other purposes of the Indenture, such Variable Rate Indebtedness shall be deemed to bear interest at an annual rate equal to 110% of (1) in the case of any period during which such Indebtedness shall have been outstanding, the weighted average interest rate per annum borne by such Indebtedness during such period and (2) in any other case, the higher of (a) the weighted average interest rate per annum borne by such Indebtedness during the 12-month period ending on the date of calculation (or, in the case of any Variable Rate Indebtedness to be issued or issued during the immediately preceding 12-month period, the weighted average interest rate per annum borne by other outstanding Indebtedness having comparable terms and issued by, or secured by agreements issued by, entities of comparable creditworthiness as the obligors with respect to such Variable Rate Indebtedness during the immediately preceding 12-month period, as evidenced by a certificate of an investment banking firm or a financial advisor knowledgeable in financial matters relating to the Issuer and the Property), and (b) the interest rate per annum borne by such Indebtedness on the date of calculation;

(ii) with respect to any Balloon Long-Term Indebtedness:

(A) unless such Indebtedness meets the requirements of clause (B), (C) or (D) below, the principal amount of such Indebtedness is deemed to be payable during the Fiscal Year or Bond Year in which such principal amount becomes due, except as provided in clause (E) below;

(B) if a Liquidity Facility is then in effect with respect to such Indebtedness, the principal amount of such Indebtedness payable in each Fiscal Year or Bond Year as of any date of calculation may be deemed to be the amount that would be payable during such Fiscal Year or Bond Year (as the case may be) if such Liquidity Facility were used or drawn upon to purchase or retire such Indebtedness on the stated maturity date thereof or on any date established for the mandatory redemption thereof, less the aggregate amount required to be on deposit in any irrevocable sinking fund established to provide for the payment of such Indebtedness in accordance with clause (C) below during such Fiscal Year or Bond Year (as the case may be), except as provided in clause (E) below;

(C) if (1) pursuant to a resolution duly adopted by the Board, an irrevocable sinking fund shall have been established to provide for the payment of such Indebtedness when due, (2) deposits to such sinking fund are current and timely and (3) verification of such timely deposits is contained in the most recent audited financial statements of the Issuer or a letter to the Trustee from an Independent Public Accountant in form and substance satisfactory to the Trustee, then the principal amount of such Indebtedness payable in each Fiscal Year or Bond Year (as the case may be) may be deemed to be the amount required to be deposited in such sinking fund for such Fiscal Year or Bond Year (as the case may be), except as provided in clause (E) below;

(D) except as provided in clause (E) below, in the case of any Balloon Long-Term Indebtedness in an aggregate principal amount that, together with the aggregate principal amount of Outstanding Optional Tender Indebtedness described in clause (iii) (C) below, does not exceed 20% of the Total Operating Revenues from the Property for the most recent Fiscal Year for which audited financial statements have been filed with the Trustee pursuant to the Indenture, the principal amount of such Indebtedness payable in each Fiscal Year or Bond Year (as the case may be) may be deemed to be the amount that would have been payable during such Fiscal Year or Bond Year (as the case may be) if such Indebtedness were required to be amortized in full from the date of its issuance or, in the case of any such Indebtedness issued to finance or refinance any Capital Improvements, at the option of the

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Issuer, a date on or before the completion of such Capital Improvements, in substantially equal annual installments of principal (such principal to be rounded to the nearest $5,000) and interest over a term equal to the shorter of (1) 30 years and (2) 120% of the weighted average economic life of the facilities financed or refinanced thereby, as evidenced by a certificate of an Independent Public Accountant; provided, however, that if any principal amount of such Indebtedness is stated to mature or is unconditionally subject to mandatory redemption within the 12-month period immediately succeeding the date of calculation, then such principal amount shall be deemed to be payable on the stated maturity date thereof or on the date established for the mandatory redemption thereof; and

(E) for purposes of calculating the Debt Service Reserve Fund Requirement, the principal amount of such Indebtedness payable in each Fiscal Year or Bond Year shall be determined in accordance with clause (D) above without regard to the aggregate principal amount of such Indebtedness outstanding from time to time or becoming due in the immediately succeeding 12-month period;

(iii) with respect to any Optional Tender Indebtedness:

(A) unless such Indebtedness meets the requirements of clause (B) or (C) below, the principal amount of such Indebtedness payable in each Fiscal Year or Bond Year as of any date of calculation shall be deemed to be the principal amount of such Indebtedness that could be payable by the Issuer during such Fiscal Year or Bond Year (as the case may be) in connection with any demand for the purchase or redemption of such Indebtedness by any holder thereof or any termination of any Credit Facility securing such Indebtedness, except as provided in clause (D) below;

(B) if a Liquidity Facility is then in effect with respect to such Indebtedness, the principal amount of such Indebtedness payable in each Fiscal Year or Bond Year as of any date of calculation may be deemed to be the amount that would be payable during such Fiscal Year or Bond Year (as the case may be) if such Liquidity Facility were used or drawn upon to purchase or retire such Indebtedness on the earliest date on which such Indebtedness may be required to be purchased or redeemed at the option of the holder thereof or in connection with any expiration of any Credit Facility securing such Indebtedness, except as provided in clause (D) below;

(C) except as provided in clause (D) below, in the case of any Optional Tender Indebtedness in an aggregate principal amount that, together with the aggregate principal amount of Outstanding Balloon Long-Term Indebtedness described in clause (ii)(D) above, does not exceed 20% of the Total Operating Revenues from the Property for the most recent Fiscal Year for which audited financial statements have been filed with the Trustee pursuant to the Indenture, the principal amount of such Indebtedness payable in each Fiscal Year or Bond Year (as the case may be) may be determined in accordance with clause (ii)(D) above as if such Optional Tender Indebtedness were Balloon Long-Term Indebtedness; and

(D) for purposes of calculating the Debt Service Reserve Fund Requirement, the principal amount of such Indebtedness payable in each Fiscal Year or Bond Year (as the case may be) shall be determined in accordance with clause (C) above without regard to the aggregate principal amount of such Indebtedness outstanding from time to time or becoming due in the immediately succeeding 12-month period; and

(iv) with respect to any Credit Facility Agreement, except as provided in clauses (ii)(B) and (iii)(B) above, so long as no demand for payment under the Credit Facility issued under such Credit Facility Agreement shall have been made, the debt service requirements of such Credit Facility Agreement shall be excluded from such calculation.

“Debt Service Fund” means the fund by that name created under the Indenture.

“Debt Service Reserve Fund” means the fund by that name created under the Indenture.

“Debt Service Reserve Fund Credit Facility” means any Credit Facility held to the credit of the Debt Service Reserve Fund.

“Debt Service Reserve Fund Requirement” means, (a) when used with respect to or in connection with the Series 2013 Bonds and any Series of Bonds secured by the Debt Service Reserve Fund maintained for the Series 2013 Bonds, including the Series 2012 Bonds, as of any particular date of computation, an amount equal to the least of (i) Maximum Annual Debt Service on all outstanding Bonds secured thereby, (ii) ten percent (10%) of the proceeds of the outstanding Bonds secured thereby and (iii) 125 percent (125%) of the average annual Debt Service

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Requirements of the outstanding Bonds secured thereby and (b) when used with respect to any other Series of Bonds or the debt service reserve fund, if any, maintained for such Bonds, such amount as shall be established in the Supplemental Indenture authorizing the issuance of such Bonds.

“Deed of Trust” means the Consolidated, Amended and Restated Leasehold Deed of Trust dated as of July 1, 2012, pertaining to the Property, executed and delivered by the Issuer, the Individual Trustees and the Trustee, and any deed of trust amendatory thereof or supplemental thereto, including (without limitation) any Supplement thereto, including, without limitation, the First Supplemental Deed of Trust and any separate or additional instrument executed and delivered by the Issuer in order to effect, record or perfect the interest of the Individual Trustees in any portion of the Property.

“Depository” means any securities depository that is a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, operating and maintaining, with its participants or otherwise, a Book-Entry System to record ownership of beneficial interests in municipal bonds, and to effect transfers of municipal bonds, in Book-Entry Form, and includes and means initially The Depository Trust Company, New York, New York.

“Developer” means an Independent Person that is a professional development company having a favorable reputation for skill and experience in developing collegiate student housing facilities similar to the Project. The Developer for the University Park Phase I Project was collectively, Academic Privatization, LLC and Allen & O’Hara, Inc. The Developer for the University Park Phase II Project was Salisbury Student Apartment Developers, LLC, a Maryland limited liability company, its successors and assigns.

“Dissemination Agent” means the Person acting in the capacity of dissemination agent under the Continuing Disclosure Agreement.

Equipment Collateral” has the meaning given to that term in the Deed of Trust.

“Event of Default,” when used in the Indenture, means any event of default specified in the Indenture as described below under “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Events of Default and Remedies,” when used in or with respect to the Deed of Trust, means any event of default specified in the Deed of Trust as described below under “SUMMARY OF CERTAIN PROVISIONS OF THE DEED OF TRUST – Events of Default and Remedies” and, when used in or with respect to the Ground Lease, means any event of default specified in Section 15.1 of the Ground Lease. See “THE GROUND LEASE – Events of Default” in this Official Statement.

“Excess Earnings” means an amount equal to the sum of (i) plus (ii) where:

(i) is the excess of (a) the aggregate amount earned from the date of issuance of the Bonds on all nonpurpose investments in which gross proceeds of the Bonds are invested (other than investments attributable to an excess described in this clause (i)), over (b) the amount that would have been earned if such nonpurpose investments (other than amounts attributable to an excess described in this clause (i)) were invested at a rate equal to the yield on the Bonds; and

(ii) is any income attributable to the excess described in clause (i).

The sum of (i) plus (ii) shall be determined in accordance with Section 148(f) of the Code. As used in the Indenture, the terms “gross proceeds,” “nonpurpose investments” and “yield” have the meanings assigned to them for purposes of Section 148(f) of the Code. “Excess Earnings,” however, shall not include any amount earned on the Bond Fund during any Bond Year if the gross earnings on the Bond Fund for such Bond Year are less than $100,000.

“First Amendment to Consolidated, Amended and Restated Ground Lease” means the First Amendment to Consolidated, Amended and Restated Ground Lease and Agreement dated as of July 13, 2012 by and between the Ground Lessor and the Issuer.

“First Supplemental Deed of Trust” means the First Supplemental Consolidated, Amended and Restated Leasehold Deed of Trust dated as of June 1, 2013 by and between the Issuer and the Individual Trustees.

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“First Supplemental Trust Indenture” means the First Supplemental Trust Indenture dated as of July 1, 2012 by and between the Issuer and the Trustee.

“Fiscal Quarter” means any one of the four three-consecutive month periods during a Fiscal Year.

“Fiscal Year” means the period of 12 consecutive months beginning on July 1 in any calendar year and ending on June 30 of the following calendar year, or such other fiscal year as the Issuer, with prior written notice to the Trustee, shall establish as the fiscal year of the Issuer.

“Government Obligations” means direct obligations of (including obligations issued or held in book-entry form on the books of the Department of Treasury) the United States of America.

“Ground Lease” means the Consolidated, Amended and Restated Ground Lease and Agreement dated June 6, 2012 by and between the Ground Lessor and the Issuer, as amended by the First Amendment to Consolidated, Amended and Restated Ground Lease, together with any and all further Supplements thereto.

“Ground Lessor” means the State for the use of the System on behalf of its constituent institution, the University, its successors and assigns.

“Improvements” means all buildings, structures and improvements of every kind and description now or hereafter erected and placed on the Land, including (without limitation) the Projects and all Additional Projects.

“Indebtedness” means, any indebtedness or liability for borrowed money, any installment sale obligation or any obligation under any lease that is capitalized under generally accepted accounting principles, that in any way is made or incurred with respect to the Property or under generally accepted accounting principles would be reflected on the annual audited financial statements of the Property prepared pursuant to the Indenture.

“Indenture” means the Original Indenture, as supplemented by the First Supplemental Trust Indenture and the Second Supplemental Trust Indenture, and as further amended, modified or supplemented from time to time by other Supplemental Indentures.

“Indenture Trust Estate” means all of the right, title and interest of the Issuer in and to the proceeds of the Bonds and all of the right, title and interest of the Issuer in and to the Revenues, any moneys and securities from time to time on deposit in any fund, account or subaccount (excluding the Rebate Fund) created by the Indenture, including, without limitation, the Revenue Fund, the Debt Service Fund, the Interest Account, the Principal Account, the Debt Service Reserve Fund, the Insurance and Condemnation Award Fund, the Redemption Fund, the Construction Fund, the Construction Account, the Capitalized Interest Account, the Contingency Allowance Account, the Issuance Cost Fund, the Capital and Furnishings Fund, the Management Fees Fund, the Surplus Fund and any and all accounts and subaccounts in any of the foregoing and any and all other real or personal property of every name and nature from time to time by delivery or by writing of any kind conveyed, mortgaged, pledged, assigned or transferred, as and for additional security under the Indenture by the Issuer or by anyone on its behalf, or with its written consent, to the Trustee.

“Independent Architect” means an Independent Person (i) authorized to engage in the practice of architecture by the laws of the State and (ii) employed by the Issuer from time to time to pass upon those matters required by the Indenture or the Deed of Trust to be passed upon by an Independent Architect.

“Independent Counsel” means any attorney duly admitted to practice law before the highest court of any state who has regularly engaged in the practice of law as a primary occupation for at least five years and who is not an officer or full-time employee of the Issuer or the Trustee. Bond Counsel to the Issuer may be deemed Independent Counsel.

“Independent Engineer” means an Independent Person (i) authorized to engage in the profession of engineering by the State and (ii) employed by the Issuer from time to time to pass upon those matters required by the Indenture or the Deed of Trust to be passed upon by an Independent Engineer.

“Independent Insurance Consultant” means an Independent Person regularly employed as an insurance consultant and employed by the Issuer as described below under “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Required Insurance; Independent Insurance Consultant,” who is qualified to survey

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risks and recommend insurance coverage for student housing facilities and who has a favorable reputation for skill and expertise in such surveys and recommendations.

“Independent Person” means a person designated by the Issuer and not an employee of the Issuer.

“Independent Public Accountant” means an Independent Person engaged in the accounting profession, either entitled to practice, or having members or officers entitled to practice, as a certified public accountant under the laws of the State and in fact independent, employed by the Issuer from time to time to pass upon those matters required by the Indenture to be passed upon by an Independent Public Accountant.

“Individual Trustees” means the individual trustees acting as trustees under the Deed of Trust, or their successors in trust who may be acting under and pursuant to the Deed of Trust from time to time.

“Insurance and Condemnation Award Fund” means the fund by that name created under the Indenture.

“Interest Account” means the account by that name created under the Indenture.

“Investment Obligations” means:

(a) Government Obligations;

(b) obligations of the following federal agencies so long as such obligations are backed by the full faith and credit of the United States of America:

(1) U.S. Export-Import Bank (Eximbank)

(2) Rural Economic Community Development Administration

(3) Federal Financing Bank

(4) General Services Administration

(5) U.S. Maritime Administration

(6) U.S. Department of Housing and Urban Development (PHAs)

(7) General Services Administration

(8) Small Business Administration

(9) Government National Mortgage Association (GNMA)

(10) Federal Housing Administration

(11) Farm Credit System Financial Assistance Corporation;

(c) negotiable or nonnegotiable certificates of deposit issued by, and time deposits with, commercial banks, trust companies or savings and loan associations (including the Trustee or affiliates of the Trustee) which have a rating on their short-term certificates of deposit on the date of purchase in the highest short-term rating category of at least two of the Rating Agencies, and secured, for the benefit of the Trustee, by lodging with a bank or trust company, acting as agent for the Trustee, as collateral security, Government Obligations having a market value not less than the amount of such deposit;

(d) repurchase agreements for Government Obligations or for such securities as are described in clause (b) above or clause (e) below, which are entered into by the Trustee with (i) banks, trust companies or dealers in government bonds which report to, trade with and are recognized as primary dealers by a Federal Reserve Bank, or (ii) financial institutions, insurance companies, or financial services firms, and in either such case, (A) are rated within the two highest rating categories (without regard to qualification, numerical or otherwise) of at least two of the Rating Agencies at the time of entry into such repurchase agreements, or (B) whose payment obligations under such repurchase agreements are guaranteed by parent entities or other third parties which are rated within the two highest rating categories (without regard to qualification, numerical or otherwise) of at least two of the Rating Agencies; which Government Obligations or securities described in clause (b) above or clause (e) below: (1) have a

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fair market value equal to at least 102% of the amount of the related repurchase obligations, and (2) are transferred to the Trustee by physical delivery, or to a third party custodian acceptable to the Trustee by physical delivery, or by an entry made on the records of the issuer of such Government Obligations or such securities;

(e) direct obligations of any of the following federal agencies which obligations are not fully guaranteed by the full faith and credit of the United States of America:

(1) Senior debt obligations rated in the highest long-term rating category (without regard to qualification, numerical or otherwise) by at least two Rating Agencies issued by the Federal National Mortgage Association (FNMA) or Federal Home Loan Mortgage Corporation (FHLMC); and

(2) Senior debt obligations of the Federal Home Loan Bank System;

(f) commercial paper which is rated at the time of purchase in the highest short-term rating category (without regard to qualification, numerical or otherwise) of at least two Rating Agencies and which matures not more than 270 days after the date of purchase;

(g) U.S. dollar denominated deposit accounts, federal funds and bankers' acceptances with domestic commercial banks which either (a) have a rating on their short-term certificates of deposit on the date of purchase in the highest short-term rating category (without regard to qualification, numerical or otherwise) of at least two Rating Agencies, or (b) are collateralized with direct obligations of the United States of America at 102% valued daily. All such certificates must mature no more than 360 days after the date of purchase. (Ratings on holding companies are not considered as the rating of the bank);

(h) investments in (i) money market funds subject to SEC Rule 2a-7 and rated in the highest short-term rating category (without regard to qualification, numerical or otherwise) of at least two Rating Agencies and (ii) public sector investment pools operated pursuant to SEC Rule 2a-7 in which the Issuer’s deposit shall not exceed 5% of the aggregate pool balance at any time and such pool is rated in the highest short-term rating category (without regard to qualification, numerical or otherwise) of at least two Rating Agencies, including any fund for which the Trustee or an affiliate of the Trustee serves as an investment advisor, administrator, shareholder servicing agent, custodian or subcustodian, notwithstanding that (A) the Trustee or an affiliate of the Trustee charges and collects fees and expenses from such funds for services rendered (provided that such charges, fees and expenses are on terms consistent with terms negotiated at arm’s length) and (B) the Trustee charges and collects fees and expenses for services rendered, pursuant to the Indenture;

(i) pre-refunded municipal obligations defined as follows: Any bonds or other obligations of any state of the United States of America or of any agency, instrumentality or local governmental unit of any such state which are not callable at the option of the obligor prior to maturity or as to which irrevocable instructions have been given by the obligor to call on the date specified in the notice;

(1) which are rated, based on an irrevocable escrow account or fund (the "escrow"), in the highest long-term rating category (without regard to qualification, numerical or otherwise) of a Rating Agency; or

(2) (x) which are fully secured as to principal and interest and redemption premium, if any, by an escrow consisting only of cash and/or direct obligations of the United States of America, which escrow may be applied only to the payment of such principal of and interest and redemption premium, if any, on such bonds or other obligations on the maturity date or dates thereof or the specified redemption date or dates pursuant to such irrevocable instructions, as appropriate, and

(y) which escrow is sufficient, as verified by a nationally recognized independent certified public accountant or verification agent, to pay principal of and interest and redemption premium, if any, on the bonds or other obligations described in this paragraph on the maturity date or dates specified in the irrevocable instructions referred to above, as appropriate.

(j) general obligations of states with a short-term rating in the highest rating category (without regard to qualification, numerical or otherwise) and a long-term rating in one of the two highest rating categories (without regard to qualification, numerical or otherwise) of at least two Rating Agencies. In the event such obligations are variable rate obligations, the interest rate on such obligations must be reset not less frequently than annually;

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(k) investment agreements, the provider of which is rated in one of the two highest rating categories, (without regard to qualification, numerical or otherwise) by two Rating Agencies under which the provider agrees to periodically deliver, on a delivery versus payment basis, such securities as are described in clauses (a), (b) and (e) above; and

(l) investment agreements issued by any financial institution, insurance company or financial services firm (i) that maintains one of the two highest rating categories (without regard to qualification, numerical or otherwise) from a Rating Agency, or (ii) whose payment obligations under such investment agreements are guaranteed by parent entities or other third parties that maintain one of the two highest rating categories (without regard to qualification, numerical or otherwise) from a Rating Agency, or (iii) whose obligations under such investment agreements are collateralized by obligations described in clauses (a), (b), (c), (d), (f) or (j) above and which are delivered to the Trustee, or registered in the name of the Trustee, or are supported by a safekeeping receipt issued by a depository satisfactory to the Trustee, or are held (including by book entries) by a third party custodian acceptable to the Trustee, provided that any such investment agreement described in this clause (iii) must provide that the value of such obligations collateralizing such investment agreement shall be maintained at a current market value (determined not more frequently than weekly) of not less than 102% of the aggregate amount of the obligations of such financial institution, insurance company or financial services firm; provided, however, that any investment agreement, at the time it is entered into, must meet and comply with the requirements of either clause (i) or clause (ii) above.

“Issuance Cost Fund” means the fund by that name created under the Indenture.

“Issuer” means the Maryland Economic Development Corporation, a body politic and corporate and an instrumentality of the State, its successors and assigns.

“Issuer Order” means a written order or request signed in the name of the Issuer by an Authorized Officer of the Issuer and delivered to the Trustee.

“Issuer’s Administrative Fee” means an annual fee payable in arrears on each Release Date in an amount equal to the Revenues for the Fiscal Year ending immediately prior to such Release Date multiplied by .500%. Any Issuer’s Administrative Fee that is not paid when due shall continue as an obligation under the Indenture and shall bear interest at a variable rate changing on the first Business Day of each month to equal the prime rate as published on the first Business Day of each month in The Wall Street Journal plus four percent (4%), provided that the initial rate shall be calculated using such prime rate as published on the date the Issuer’s Administrative Fee was due, or if such date is not a Business Day, the next succeeding Business Day.

“Issuer’s Annual Fee” means (i) an annual fee payable in advance on the 2013 Closing Date and each anniversary of such 2013 Closing Date in an amount equal to the principal amount of the Series 2013 Bonds Outstanding on such 2013 Closing Date or such anniversary, as applicable, multiplied by 100% and (ii) an annual fee payable in advance on each anniversary of the date of issuance of the Series 2012 Bonds in an amount equal to the principal amount of the Series 2012 Bonds Outstanding on such anniversary, as applicable, multiplied by 100%. Any Issuer’s Annual Fee that is not paid when due shall continue as an obligation under the Indenture and shall bear interest at a variable rate changing on the first Business Day of each month to equal the prime rate as published on the first Business Day of each month in The Wall Street Journal plus four percent (4%), provided that the initial rate shall be calculated using such prime rate as published on the date the Issuer’s Annual Fee was due, or if such date is not a Business Day, the next succeeding Business Day.

“Issuer’s Documents” means the Bond Documents executed and delivered by the Issuer.

“Issuer’s Tax Certificate” means, with respect to the Series 2013 Bonds, the Tax Compliance Agreement executed and delivered by the Issuer upon the issuance of the Series 2013 Bonds.

“Land” means, collectively, the Phase I Project Site and the Phase II Project Site, each as more particularly described in Exhibit A to the Deed of Trust.

“Lease Year” has the meaning ascribed thereto under the Ground Lease, and for purposes of the Indenture shall be the same as the Bond Year.

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“Liquidity Facility” means a written commitment to provide money to purchase or retire any Indebtedness if (i) on the date of delivery of such Liquidity Facility, the unsecured long-term indebtedness or claims paying ability of the provider of such Liquidity Facility or its parent holding company or other controlling entity has a short-term rating in the highest rating category and a long-term rating in one of the three highest rating categories and (ii) as of any particular date of determination, no amount realized under such Liquidity Facility for the payment of the principal or the purchase or redemption price of such Indebtedness (exclusive of amounts realized for the payment of accrued interest on such Indebtedness) shall be required to be repaid by the Issuer for a period of at least one year.

“Long-Term Indebtedness” means any of the following incurred or assumed by the Issuer with respect to the Property: (i) the Bonds, (ii) any obligation for the payment of principal and interest with respect to money borrowed for an original term, or renewable at the option of the borrower for a period from the date originally incurred, longer than one year, (iii) any obligation for the payment of money under leases that are required to be capitalized under generally accepted accounting principles, (iv) any obligation for the payment of money under installment purchase contracts having an original term in excess of one year, and (v) any obligation that would constitute Short-Term Indebtedness if a Liquidity Facility were not in effect with respect thereto.

“Management Agreement” means the Consolidated, Amended and Restated Management Agreement dated as of July 1, 2012, by and between the Issuer and the Manager, and any other agreement with a Manager for the management of the Projects, together with any and all Supplements thereto.

“Management Consultant” means an Independent Person that is a professional management consultant having a favorable national reputation for skill and experience in consulting work relating to facilities similar to the Projects, who may be (without limitation) an Independent Public Accountant if such Independent Public Accountant otherwise meets the criteria set forth in this definition.

“Management Fees” means the fees payable to the Manager under a Management Agreement.

“Management Fees Fund” means the fund by that name created under the Indenture.

“Manager” means an Independent Person that is a professional management company having a favorable reputation for skill and experience in managing collegiate student housing facilities similar to the Projects to be employed by the Issuer for management of the Projects or any Additional Project. The Manager as of the 2013 Closing Date is EDR Management Inc. (formerly known as Allen & O’Hara Educational Services, LLC), a Delaware corporation qualified to do business in the State.

“Maximum Annual Debt Service” means, when used with reference to any Long-Term Indebtedness, as of any particular date of computation, the greatest amount required in the then current or any future Bond Year or Fiscal Year, respectively, to pay the Debt Service Requirements of such Long-Term Indebtedness.

“Maximum Annual Debt Service Certificate” has the meaning given to that term in “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Authorization of Additional Bonds.”

“Memorandum of Ground Lease” means the Memorandum of Ground Lease dated as of June 6, 2012 relating to the Ground Lease recorded among the Land Records of Wicomico County, Maryland, together with any and all Supplements thereto.

“Net Income Available for Debt Service” means, for any period, the amount equal to: (i) Revenues with respect to the Property for such period (including, without limitation, all earnings for such period on funds held by the Trustee pursuant to the Indenture and available for the payment of operating expenses of the Property and debt service on the Bonds) less (ii) expenses of the Property for such period, plus (iii) the sum of (a) interest expense on Permitted Indebtedness, (b) depreciation, (c) amortization of issuance costs, and (d) payments of rent owed to the Ground Lessor pursuant to the Ground Lease (to the extent that such payments of rent are determined to be an expense of the Project), all with respect to the Property for such period, and all terms as defined in accordance with generally accepted accounting principles.

“Operating Account” means the account maintained by the Manager or the Trustee on behalf of the Issuer from which the Manager or the Trustee shall pay the operating expenses of the Property.

“Operating Carryover” has the meaning ascribed thereto in the Ground Lease.

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“Operating Carryover Account” has the meaning ascribed thereto in the Ground Lease.

“Optional Tender Indebtedness” means any Indebtedness that is subject to optional or mandatory tender by the holder thereof (including, without limitation, any mandatory tender in connection with the expiration of any Credit Facility securing such Indebtedness) for purchase or redemption prior to the stated maturity date thereof if the purchase or redemption price of such Indebtedness is under any circumstances payable by the Issuer.

“Original Indenture” means the Trust Indenture dated as of June 1, 2003 by and between the Issuer and the Trustee.

“Outstanding” or “outstanding” means, as of any particular date, all Bonds authenticated and delivered under the Indenture except (i) any Bond cancelled by the Trustee (or delivered to the Trustee for cancellation) at or before such date, (ii) any Bond for the payment of the principal or Redemption Price of and interest on which provision shall have been made as provided in the Indenture, and (iii) any Bond in lieu of or in substitution for which a new Bond shall have been authenticated and delivered pursuant to the Indenture, and (iv) any Bond held by or for the benefit of the Issuer or the Ground Lessor; provided, however, that only Bonds which a Responsible Officer of the Trustee actually knows to be so held shall be considered not Outstanding.

“Paying Agent” means the Trustee, or any successor paying agent appointed under the Indenture.

“Permitted Encumbrance” means (a) any lien arising by reason of any good faith deposit with the Issuer in connection with the Property and relating to any lease of real estate, bid or contract (other than any contract for the payment of money), any deposit by the Issuer to secure any public or statutory obligation relating to the Property, or to secure, or in lieu of, any surety, tax or appeal bond relating to the Property, and any deposit as security for the payment of taxes or assessments or other similar charges on or in connection with the Property; (b) any lien arising by reason of any deposit with, or the giving of any form of security to, any governmental agency or any body created or approved by law or governmental regulation for any purpose relating to the Property at any time as required by law or governmental regulation as a condition to the transaction of any business relating to the Property or the exercise of any privilege or license relating to the Property or to enable the Issuer to participate in any funds established to cover any insurance risk relating to the Property or in connection with workers’ compensation, unemployment insurance, any pension or profit-sharing plan or other social security relating to the Property, or to share in the privileges or benefits required for the participation of the Issuer in such arrangements; (c) any judgment lien against the Issuer arising from the Issuer’s ownership or operation of the Property, so long as such judgment is being contested in good faith and is fully bonded, fully covered by a letter of credit or other surety, or covered by insurance; (d) any right reserved to or vested in any municipality or public authority by the terms of any right, power, franchise, grant, license, permit or provision of law affecting the Property; any lien on the Property for taxes, assessments, levies, fees, water and sewer rents or charges and other governmental and similar charges, in each case arising from the Property, and any lien of any mechanic, materialman, laborer, supplier or vendor for work or services performed or materials furnished in connection with the Property that is not due and payable or that is not delinquent or the amount or validity of which is being contested and execution thereon stayed; (e) the Indenture, the Deed of Trust, the Ground Lease and the Memorandum of Ground Lease; (f) any lien granted solely for the benefit of all Holders of Bonds in accordance with the Indenture; (g) any lease permitted under the terms of the Indenture or the Deed of Trust; (h) any lien placed upon any tangible real or tangible personal property being acquired by the Issuer for use at or in connection with the Property to secure all or a portion of the purchase price thereof, and any landlord’s lien under any lease permitted under the Indenture; (i) any lien or encumbrance on any property existing on the date on which such property was acquired by the Issuer; (j) such easements, rights-of-way, servitudes and restrictions reserved in or permitted by the Ground Lease, including any liens in favor of the Ground Lessor which are subordinate to the Indenture and the Deed of Trust, or with regard to which the provisions of the Deed of Trust are satisfied; (k) other defects, liens and encumbrances arising in connection with the Property which shall not materially impair the use of the Property for its intended purposes or the value of the Property as evidenced by a certificate of an Independent Engineer delivered to the Trustee; (l) such easements, servitudes, restrictions, licenses, restrictive covenants, rights-of-way (including the dedication of public highways or public or private utility easements) as may be required by governmental authorities or utility providers in connection with the construction of, or the furnishing of utilities to, the Property as contemplated in the Plans and Specifications; and (m) any Rental Agreements of any portion of the Property.

“Permitted Indebtedness” means the Bonds and any other Indebtedness to which the Ground Lessor consents.

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“Person” or “person” means any natural person, firm, association, corporation, company, trust, partnership, public body or other entity.

“Phase I Project” means (a) the 578-bed student housing facility constructed on the Phase I Project Site and known as “University Park Apartments – Phase I,” and (b) furnishings, fixtures, furniture, equipment and machinery necessary or useful for the foregoing. See “THE PROJECTS – The Phase I Project” in this Official Statement.

“Phase I Project Site” means the parcel or parcels of land in Wicomico County, Maryland containing approximately 12 acres, on which the Phase I Project is located and more particularly described in Exhibit A to the Deed of Trust.

“Phase II Project” means (a) the 312-bed student residence facility constructed on the Phase II Project Site and known as “University Park Apartments – Phase II,” and (b) furnishings, fixtures, furniture, equipment and machinery necessary or useful for the foregoing. See “THE PROJECTS – The Phase II Project” in this Official Statement.

“Phase II Project Site” means the parcel or parcels of land in Wicomico County, Maryland containing approximately 9 acres on which the Phase II Project is located and more particularly described in Exhibit A to the Deed of Trust.

“Plans and Specifications” means the plans and specifications in accordance with which the Phase I Project and the Phase II Project were constructed.

“Prime Rate” means the prime rate of interest established and declared from time to time by the Trustee or an affiliate of the Trustee as a commercial lending institution, or in the absence of such, the rate designated the “Prime Rate” as published each Business Day in The Wall Street Journal. Any adjustment in the Prime Rate shall be made effective as of the date of any adjustment in the prime rate as established and declared.

“Principal Account” means the account by that name created under the Indenture.

“Principal Underwriters” means, with respect to the Series 2013 Bonds, RBC Capital Markets, LLC, and with respect to any Additional Bonds, the firms or corporations named as the Principal Underwriters, if any, or other financial advisor, if any, of any Additional Bonds in any Supplemental Indenture pertaining to the issuance of such Additional Bonds and any other firms or corporations named as underwriters in the bond purchase agreement for any Bonds; provided, however, that (i) in the event that two or more firms or corporations are named as the Principal Underwriters and any such firm or corporation retires from active business leaving no successor, the term shall thereafter mean the remaining underwriter; (ii) in the event that only one firm or corporation is named or remains as the Principal Underwriter and such firm or corporation retires from active business leaving no successor, the provisions of the Indenture that relate to the Principal Underwriters shall no longer be in force and effect; and (iii) in the event that any firm or corporation succeeds to the business of any Principal Underwriter by assignment, merger or otherwise, such firm or corporation shall be deemed to be a Principal Underwriter.

“Project” or “Projects” means the Phase II Project and for purposes of the definitions of “Administrative Expenditures,” “Capital Improvements,” “Costs,” “Management Agreement,” “Management Consultant,” “Net Income Available for Debt Service,” “Property” and in Section 2.14, Section 4.05(c), Section 4.12(d), Section 5.05, Section 7.04, Section 7.05, and Section 7.08 of the Original Indenture, it is intended to include the Phase I Project and any other Additional Projects.

“Project Operating Reserve Fund” means the fund of that name held by the Issuer, and further described as the “Operating Reserve Fund” in the Ground Lease, the moneys on deposit in which will be used by the Issuer for the purposes described in the Ground Lease.

“Property” means the Projects, the Additional Projects, the Land, the Improvements, the Equipment Collateral and all other items of property described in the Granting Clauses of the Deed of Trust and included in the term “Property” as used and defined in the Deed of Trust.

“Rating Agency” means Fitch Ratings, Inc., Moody’s Investors Service, Inc. or Standard & Poor’s Ratings Services, a Division of The McGraw-Hill Companies, Inc., or any other securities rating agency that, at the request of the Issuer, shall have assigned a rating that is then in effect with respect to any Bonds, and their successors and

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assigns, and “Rating Agencies” means each such Rating Agency, collectively. Whenever the term “Rating Agency” or “Rating Agencies” is used in the Indenture, it shall mean or include the Rating Agency, if any, that is then maintaining a rating on the Bonds.

“Rebate Amount” means the amount (determinable as of the last day of the fifth Bond Year and upon retirement of the last Bond) of the arbitrage profits payable to the United States government at the times and in the amounts specified in Section 148(f) of the Code, as set forth in the Indenture.

“Rebate Analyst” means an Independent Person, satisfactory to the Issuer, which is experienced in the calculation of amounts required to be rebated to the United States under Section 148(f) of the Code.

“Rebate Fund” means the Rebate Fund which may be created pursuant to the Indenture.

“Redemption Fund” means the fund by that name created under the Indenture.

“Redemption Price” means the principal amount of a Bond or such portion thereof plus the applicable premium, if any, payable upon redemption thereof pursuant to the Indenture.

“Registrar” means the Trustee in its capacity as bond registrar under the Indenture.

“Release Date” means the 10th day following receipt by the Trustee of the audited financial statements of the Issuer relating to the Property (or if such 10th day is not a Business Day, the immediately succeeding Business Day).

“Release Test” has the meaning given to that term in “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Surplus Fund.”

“Rental Agreement” has the meaning given thereto in the Ground Lease.

“Resolution” means the Resolutions adopted by the Board on February 25, 2013, pertaining to the Series 2013 Bonds.

“Responsible Officer” means, when used with respect to the Trustee, any officer within the corporate trust department of the Trustee, including any vice president, assistant vice president, assistant treasurer, trust officer or any other officer of the Trustee who customarily performs functions similar to those performed by the Persons who at the time shall be such officers, respectively, or to whom any corporate trust matter is referred because of such Person’s knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of the Indenture.

“Revenue Covenant” means the covenant of the Issuer described in this Official Statement under the heading “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS – Revenue Covenant.”

“Revenue Fund” means the fund by that name created under the Indenture.

“Revenue Test” means, with respect to any action by the Issuer that requires satisfaction of the Revenue Test, that there shall have been delivered to the Trustee a certificate of an Authorized Officer of the Issuer to the effect that the Coverage Ratio for the most recent Fiscal Year for which audited financial statements have been filed with the Trustee as required by the Indenture was not less than 1.20.

“Revenues” means all of the Issuer’s receipts, revenues, rentals, fees, income, insurance proceeds, Condemnation Awards and other moneys derived from the ownership, operation or leasing of any portion of the Property (including, without limitation, parking fees) and all rights to receive the same, whether in the form of accounts, general intangibles or other rights, and the proceeds of such accounts, general intangibles and other rights, whether now existing or hereafter coming into existence or whether now owned or held or hereafter acquired; provided, however, that Security Deposits shall not constitute Revenues and shall be deposited by the Manager, or whenever there is not a Manager, by the Trustee, in the Security Deposit Account, until such time as the Issuer shall be permitted to apply such Security Deposits to the payment of rent or to the repair and maintenance of the Property in accordance with the terms of a lease, rental agreement or other occupancy agreement.

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“Second Supplemental Trust Indenture” means the Second Supplemental Trust Indenture dated as of June 1, 2013 by and between the Issuer and the Trustee.

“Security Deposit” means any security deposit required under any lease, rental agreement or other occupancy agreement for a unit in the Project.

“Security Deposit Account” means the account maintained by the Manager or the Trustee on behalf of the Issuer in which Security Deposits shall be deposited.

“Serial Bonds” means the Bonds of any Series that are stated to mature in consecutive annual installments.

“Series” means any series of Bonds authorized by the Indenture.

“Series 2012 Bonds” means the Maryland Economic Development Corporation Student Housing Revenue Bonds (Salisbury University Project) Series 2012.

“Series 2013 Bonds” means the Maryland Economic Development Corporation Student Housing Refunding Revenue Bonds (Salisbury University Project) Series 2013.

“Short-Term Indebtedness means any Indebtedness incurred or assumed by the Issuer for the Property for a term not exceeding 365 days, except any such Indebtedness with respect to which a Liquidity Facility is then in effect. Optional Tender Indebtedness shall not be deemed to constitute Short-Term Indebtedness for the purposes of the Indenture solely by reason of the option of the holder thereof to require the redemption or purchase thereof or any required redemption or purchase thereof in connection with the termination of the Liquidity Facility securing such Optional Tender Indebtedness prior to the stated maturity thereof.

“Sinking Fund Installment” means the amount of money provided in the Indenture, and in each Supplemental Indenture authorizing any Series of Additional Bonds, to redeem or pay at maturity Term Bonds at the times and in the amounts provided in the Indenture or such Supplemental Indenture (as the case may be), less the amount of any credit against such amount arising from the purchase of Term Bonds in any prior Bond Year as provided in the Indenture.

“State” means the State of Maryland.

“Supplement” or “Supplements” means any and all extensions, renewals, modifications, amendments, supplements, and substitutions.

“Supplemental Indenture” means any indenture of the Issuer amending, modifying or supplementing the Indenture, any Supplemental Indenture, or any Bond, adopted and becoming effective in accordance with the terms of the Indenture.

“Surplus Fund” means the fund by that name created under the Indenture.

“System” means the University System of Maryland, and its successors and assigns.

“Tax-Exempt Bonds” means the Series 2012 Bonds, the Series 2013 Bonds and any other Bonds with respect to which there shall have been delivered to the Issuer an opinion of Bond Counsel to the effect that the interest on such Bonds is excludable from gross income for federal income tax purposes.

“Taxes” means all taxes, water rents, sewer rents, assessments and other governmental or municipal or public or private dues, charges and levies and any prior liens (including federal tax liens) for the Taxes which are or may be levied, imposed or assessed upon the Property or any part thereof, or any leases pertaining thereto, or upon the rents, issues, income or profits thereof, whether any or all of the aforementioned be levied directly or indirectly or as excise taxes or as income taxes.

“Term Bonds” means the Series 2012 Bonds maturing on June 1, 2027 and June 1, 2030, the Series 2013 Bonds maturing on June 1, 2027 and June 1, 2034 and the Bonds of any other Series, other than Serial Bonds, payable prior to or at their stated maturity from Sinking Fund Installments deposited in the Principal Account.

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“Total Operating Revenues from the Property” means, for any period, the sum of all operating revenues of the Issuer for such period with respect to the Property, determined in accordance with generally accepted accounting principles consistently applied.

“Trust Estate” means the Indenture Trust Estate and all of the right, title and interest of the Trustee in and to the Deed of Trust.

“University” means Salisbury University and its successors and assigns.

“Variable Rate Indebtedness” means, as of any particular date, Long-Term Indebtedness the interest rate on which is not established at a fixed rate or rates for the remaining term thereof.

“2013 Closing Date” means June 3, 2013.

Any reference to a particular percentage or proportion of the Holders of Bonds of a Series shall mean the Holders at the particular time of the specified percentage or proportion in aggregate principal amount of all Bonds of such Series then Outstanding under the Indenture, except Bonds held by or for the account of the Issuer or the Ground Lessor, whether or not pledged to or by the Issuer to secure any Indebtedness; provided, however, that Bonds so pledged may be regarded as outstanding if the pledgee shall establish to the satisfaction of the Trustee the pledgee’s right to vote such Bonds. Bonds held by any Credit Facility Provider shall not be deemed to be held by or for the account of the Issuer. Any reference to Bonds the consent or direction of a specified proportion of the Holders of which is required or permitted prior to the taking of any action under the Indenture shall mean the Holders of such proportion of Outstanding Bonds as shall be affected thereby.

SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE

The following is a summary of certain provisions of the Indenture. It is not a complete recital of the terms of the Indenture and reference should be made to the Indenture for a complete statement of its terms. Words and terms used in this summary shall have the same meanings as in the Indenture, except where otherwise noted.

Creation of Funds and Accounts

The following funds and separate accounts within funds are created by the Issuer under the Indenture, subject to the provisions of any Supplemental Indenture, and shall be held and maintained by the Trustee in accordance with the provisions of the Indenture: Revenue Fund, Construction Fund (Construction Account, Capitalized Interest Account and Contingency Allowance Account), Debt Service Fund (Interest Account and Principal Account), Issuance Cost Fund, Capital and Furnishings Fund, Management Fees Fund, Redemption Fund, Insurance and Condemnation Award Fund, and Surplus Fund.

Issuance Cost Fund

The Trustee shall disburse from the Issuance Cost Fund the costs of issuance of the Series 2013 Bonds as directed by Issuer Order. Any moneys remaining in the Issuance Cost Fund after six months from the 2013 Closing Date shall be transferred to the Principal Account by the Trustee, unless otherwise directed by Issuer Order.

Deposit of Revenues; Deposit of Certain Proceeds

The Trustee shall deposit the Revenues into, and make such transfers from, the Revenue Fund as described under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS – Revenue Fund” in this Official Statement. The Trustee also shall deposit into the Revenue Fund proceeds of any use and occupancy or business interruption insurance paid by the Issuer to the Trustee and identified to the Trustee as such by the Issuer and transfer the same (i) to the Interest Account, to the extent of the amount of such proceeds that represents interest accruing on the Bonds for the period covered by such payment, and (ii) to the Principal Account, to the extent of the amount of such proceeds that represents the amount, if any, payable by the Issuer during the period covered by such payment in respect of the principal of or Sinking Fund Installments for the Bonds. The Trustee shall deposit into the Revenue Fund any voluntary payments made by the Issuer or the University to the Trustee for the redemption of Bonds and identified to the Trustee as such by the Issuer or the University and the Trustee shall transfer such moneys to the Redemption Fund immediately upon deposit thereof. Moneys deposited at any time in the Revenue Fund constituting any voluntary payments made by the Issuer to the Trustee or net proceeds of any alteration or demolition of the Project or replacement of Equipment Collateral shall be paid to the Redemption Fund. Moneys

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deposited in the Revenue Fund at any time constituting proceeds of any surety bond delivered in connection with the acquisition of the Project identified to the Trustee as such by the Issuer or the University, or any Additional Projects financed with the proceeds of Bonds shall be paid to the Construction Account immediately upon deposit thereof. Notwithstanding anything to the contrary contained in the Indenture, the Trustee shall pay out of the Revenue Fund at any time and from time to time, upon Issuer Order any and all Administrative Expenditures that are due and payable and identified in such Issuer Order before it makes any transfers from the Revenue Fund as described in clauses First through Seventh under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS – Revenue Fund” in this Official Statement; provided, however, that if moneys in the Revenue Fund are not sufficient to pay such Administrative Expenditures, the Trustee shall pay such Administrative Expenditures from moneys not representing the proceeds of the Series 2013 Bonds on deposit in the funds and accounts in the reverse order listed described in clauses First through Seventh under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS – Revenue Fund” in this Official Statement. The Trustee shall have no responsibility for the application of moneys that have been transferred to the Operating Account. Payment of the Issuer’s Annual Fee due shall be paid out of the Operating Account. If any transfers from the Revenue Fund or other funds and accounts provided in the Indenture are not sufficient to make the deposits or transfers required under the Indenture, the amounts of the resulting deficiencies shall be added to the immediately succeeding required deposits or transfers until cured. During any period in which there is no Manager, the Trustee shall establish and maintain, upon Issuer Order (i) an Operating Account into which it shall make deposits required by clause First under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS – Revenue Fund” in this Official Statement, and from which it shall pay the operating expenses of the Property as certified in writing to the Trustee by the Issuer, and (ii) a Security Deposit Account into which it shall deposit Security Deposits. Moneys in the Security Deposit Account shall be applied in accordance with the leases, rental agreements or other occupancy agreements pursuant to which the Security Deposits were made as directed in writing by the Issuer.

Debt Service Fund; Application of Moneys

On each interest payment date the Trustee shall pay or cause to be paid from the Interest Account the interest due on the Outstanding Bonds to the extent not paid from moneys in the Capitalized Interest Account. The Trustee also shall pay from the Interest Account any amounts required for the payment of accrued interest upon any purchase or redemption of Outstanding Bonds.

On each June 1, the Trustee shall pay or cause to be paid from the Principal Account the principal amount due, if any, on the Outstanding Bonds maturing or becoming due by reason of mandatory sinking fund redemption on such date, upon presentation and surrender of the requisite Bonds if such presentation and surrender are required pursuant to the provisions thereof. The Trustee shall take all action necessary to effect the timely redemption of Outstanding Term Bonds from the Principal Account in accordance with the Sinking Fund Installments as set forth in the Bonds of such Series. Moneys in the Principal Account shall be applied to the purchase or redemption of Bonds as follows:

Subject to the provisions of the Indenture summarized in the immediately following paragraph, prior to each June 1 on which Outstanding Term Bonds are subject to redemption from any Sinking Fund Installment, the Trustee shall call for redemption from moneys in the Principal Account such principal amount of Outstanding Term Bonds subject to redemption from such Sinking Fund Installment on such June 1, at a price equal to the principal amount thereof (accrued interest on such Term Bonds being payable from the Interest Account) as is equal to the Sinking Fund Installment due on such June 1 less the amount previously credited against such Sinking Fund Installment in accordance with the Indenture. On such June 1, the Trustee shall pay or cause to be paid out of the Principal Account the principal amount of Term Bonds so called for redemption as described in this paragraph upon the presentation and surrender of the requisite Term Bonds.

Upon Issuer Order, the Trustee shall, from time to time, endeavor to purchase Outstanding Term Bonds subject to redemption from the Sinking Fund Installment due on the immediately succeeding June 1 at the most advantageous price then obtainable with reasonable diligence. The Trustee shall pay the interest accrued on such Term Bonds from the Interest Account and the purchase price from the Principal Account, but no such purchase shall be made by the Trustee (i) within a period of 45 days immediately preceding any June 1 on which Term Bonds are subject to redemption from any Sinking Fund Installment, or (ii) at a price, including any brokerage and other charges, greater than the principal amount thereof and accrued interest thereon. The aggregate of the purchase prices of the Term Bonds of each Series so purchased in any Bond Year shall not exceed the amount deposited in the

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Principal Account on account of the Sinking Fund Installment for Term Bonds of such Series due on the immediately succeeding June 1; provided, however, that if in any Bond Year the amount credited against the Sinking Fund Installment for Term Bonds of any Series equals or exceeds the Sinking Fund Installment for such Term Bonds due on the immediately succeeding June 1, any excess amount on deposit in the Principal Account shall be applied by the Trustee to the purchase of any Term Bonds then Outstanding as shall be directed by Issuer Order.

If (i) the Trustee purchases Term Bonds during any Bond Year as provided above, (ii) the Issuer delivers to the Trustee for cancellation on or before the 45th day immediately preceding any June 1 on which a Sinking Fund Installment is due with respect to Term Bonds subject to redemption from such Sinking Fund Installment on such June 1 (provided that the price paid by the Issuer to purchase any such Bonds, including any brokerage and other charges, shall not exceed the principal amount of such Bonds and accrued interest thereon), or (iii) Term Bonds subject to redemption from a Sinking Fund Installment due on the June 1 immediately succeeding any Bond Year are otherwise redeemed during such Bond Year, then an amount equal to 100% of the aggregate principal amount of any such Bonds so purchased and delivered to the Trustee for cancellation or redemption shall be credited against such Sinking Fund Installment.

If the aggregate principal amount of Term Bonds of any Series purchased or redeemed in any Bond Year is in excess of the Sinking Fund Installment due on such Term Bonds on the immediately succeeding June 1, the Trustee shall credit such excess against subsequent Sinking Fund Installments for such Term Bonds as directed by Issuer Order.

Subject to provisions discussed in “Investment of Moneys; Application of Earnings” below, at the end of each Bond Year, if any moneys are on deposit in the Debt Service Fund, an amount of such moneys which is estimated by the Issuer in writing to the Trustee to be not greater than (i) one-twelfth (1/12) of the principal on the Bonds to become due during the succeeding Bond Year shall be deposited by the Trustee in the Principal Account and (ii) one-twelfth (1/12) of the interest to become due during the succeeding Bond Year shall be deposited by the Trustee in the Interest Account, and the balance of such moneys shall be transferred by the Trustee in accordance with clauses Fourth through Seventh under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS – Revenue Fund” in this Official Statement.

Use of Moneys in Certain Funds to Pay Debt Service on Bonds; Debt Service Reserve Fund

If on any interest payment date the amount in the Interest Account shall be less than the amount of interest then due on the Outstanding Bonds, after taking into account any moneys available therefor in the Capitalized Interest Account in accordance with the Indenture, or if on any June 1 the amount credited to the Principal Account shall be less than the amount of the principal and the Sinking Fund Installment (either or both, as the case may be) then due on the Bonds, the Trustee forthwith shall transfer moneys, first, to the Interest Account, and second, to the Principal Account to the extent necessary to make good any deficiency first as provided under the last paragraph of “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS – Revenue Fund” in this Official Statement, and second from the Debt Service Reserve Fund.

For the purposes of any Debt Service Reserve Fund, a “deficiency” shall mean that the value of the assets of the Debt Service Reserve Fund is less than the Debt Service Reserve Fund Requirement.

The Trustee shall determine the value of the assets of the Debt Service Reserve Fund in the manner prescribed in the Indenture as of the close of business (i) on May 1 and November 1 in each Bond Year, (ii) on the date of any withdrawal from the Debt Service Reserve Fund and on the last Business Day of each month thereafter until such determination discloses that a deficiency no longer exists in the Debt Service Reserve Fund, (iii) on any date on which the Trustee obtains actual knowledge that any Debt Service Reserve Fund Credit Facility held to the credit of the Debt Service Reserve Fund is no longer entitled to be credited against the Debt Service Reserve Fund Requirement, (iv) on the date that is six months prior to the stated expiration date of any Debt Service Reserve Fund Credit Facility, and (v) on such other dates as shall be directed by Issuer Order.

Management Fees Fund

In accordance with the Indenture, the Trustee shall set up an account within the Management Fees Fund for each Manager of the Project. Any subordinated Management Fees due and owing, and accrued and not yet payable, to any Manager shall be deposited into the account specified for such Manager. The Trustee is directed under the Indenture to establish an account for the initial Manager within the Management Fees Fund.

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Subject to the provisions described in the last two paragraphs under the heading “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS – Revenue Fund” in this Official Statement and the last sentence of this paragraph, moneys on deposit in the applicable account in the Management Fees Fund shall be paid to the applicable Manager on the Release Date relating to the Fiscal Year for which the moneys in the applicable account of the Management Fees Fund are held, provided the Release Test has been satisfied, in the amount as certified to the Trustee by the Manager as shown on the annual audited financial statements delivered to the Trustee pursuant to the Indenture. If in any year, the Release Test is not satisfied, amounts relating to all immediately preceding prior Fiscal Years (or other applicable period), for which the Release Test was not met, shall remain in the relevant account of the Management Fees Fund until the Release Test is met, at which time, the Trustee shall pay all amounts relating to Fiscal Years prior to the then current Fiscal Year, on deposit in to the applicable account to the Manager for which the account is held, in the applicable amounts as have been certified to the Trustee by the relevant Manager for each Fiscal Year and shown on the annual audited financial statements relating to such Fiscal Year. In the event the amount of the subordinated Management Fees is adjusted pursuant to the calculation of the Release Test, the Trustee shall transfer any excess to the Surplus Fund and any deficiency shall be cured from monies on deposit in the Surplus Fund, if any. See “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS – Surplus Fund” in this Official Statement. If the adjustment is greater than ten percent (10%), then any transfer to the Surplus Fund shall include allocable investment earnings, as certified by the Independent Public Accountant, determined in accordance with the satisfaction of the Release Test. In the event there are multiple accounts in the Management Fees Fund, transfers and disbursements pursuant to the provisions described in the last two paragraphs under the heading “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS – Revenue Fund” in this Official Statement to and from each account shall be made pro rata.

Redemption Fund

On the 2013 Closing Date, the Trustee shall transfer from the Redemption Fund the sum of $13,623,750.21 to be applied to the redemption, in accordance with the Indenture, of all of the outstanding Series 2003 Bonds.

On any date on which a determination of the value of the assets of the Debt Service Reserve Fund discloses a deficiency therein, the Trustee shall transfer to the Debt Service Reserve Fund from the Redemption Fund any amount on deposit in the Redemption Fund (other than moneys set aside to pay the Redemption Price of any Bonds theretofore called for redemption and moneys required for the purchase of Bonds theretofore contracted to be purchased) to the extent of such deficiency. The Trustee shall notify the Issuer of such transfer and the amount thereof. The Trustee may use moneys in the Redemption Fund to pay interest on any Bonds to be redeemed from funds therein to the extent that moneys therefor are not available in the Interest Account.

Moneys in the Redemption Fund shall be applied by the Trustee to the purchase or redemption of Bonds as the Issuer shall direct by Issuer Order. At the written direction of an Authorized Officer of the Issuer, the Trustee shall, from time to time, endeavor to purchase such Bonds at the most advantageous price obtainable with reasonable diligence, but no such purchase shall be made by the Trustee (i) within the period of 45 days immediately preceding any interest payment date on which such Bonds are subject to call for redemption under the provisions of the Indenture, or (ii) at a price, including any brokerage or other charges, greater than the Redemption Price of such Bonds on the next interest payment date on which such Bonds are subject to redemption and accrued interest to the date of purchase of such Bonds. Any Bonds purchased under the Indenture shall be cancelled by the Trustee.

Subject to the provisions of the paragraph below, to the extent provided in any Supplemental Indenture authorizing the issuance of any Series of Additional Bonds (i) moneys available for the redemption or purchase of Bonds on any date shall be allocated among all Series of Bonds in proportion (as nearly as practicable) to the aggregate principal amount of Bonds of each such Series subject to redemption from such moneys on such date and (ii) the Bonds of such Series of Additional Bonds to be purchased or redeemed on any date shall be selected in accordance with the provisions of such Supplemental Indenture.

Insurance and Condemnation Award Fund

The Trustee shall deposit into the Insurance and Condemnation Award Fund (i) all proceeds received under any title insurance policy relative to the Property, (ii) the proceeds of any Property taken in the exercise of the power of eminent domain, condemnation or through the exercise of any right or any obligation on the part of any public authority to purchase the same, or as a result of any agreement between the Issuer and the State, and (iii) any

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insurance proceeds payable in connection with the loss, damage or destruction of any portion of the Property (other than the proceeds of any use and occupancy insurance policy, which are to be deposited by the Trustee into the Revenue Fund as described above), and the proceeds under any title insurance policy relative to the Property and related payments paid by the Issuer and identified to the Trustee as such by the Issuer.

If such moneys are to be used to pay the costs of repair or replacement of lost, damaged, destroyed or taken property, such moneys shall be disbursed by the Trustee from time to time upon requisitions meeting requirements of the Indenture. If such moneys are to be applied to the redemption of Bonds, such moneys shall be transferred by the Trustee to the Redemption Fund upon Issuer Order to be applied first to the extraordinary redemption of the Bonds on the earliest practicable redemption date.

Construction Fund

Except as otherwise expressly provided in the Indenture, moneys deposited in any Construction Account of the Construction Fund shall be used only to finance or refinance the Costs of the Project and any Additional Projects, including (without limitation) reimbursements for such costs and expenses paid prior to the issuance of the Bonds by the Issuer and including (without limitation) any Administrative Expenditures in connection with the Project or such Additional Projects as are approved by Bond Counsel.

Moneys on deposit in any Capitalized Interest Account of the Construction Fund shall be used by the Trustee to pay on each interest payment date as provided in the Indenture.

Moneys deposited in any Contingency Allowance Account shall only be used for unforeseen Costs.

A separate Construction Account, Capitalized Interest Account, and/or Contingency Allowance Account may be created for any series of Additional Bonds. No separate Construction Account, Capitalized Interest Account, or Contingency Allowance Account has been established in connection with the Series 2013 Bonds.

Investment of Moneys; Application of Earnings

Moneys in any of the funds or accounts established by the Indenture (exclusive of any proceeds drawn under a Debt Service Reserve Fund Credit Facility) shall be invested by the Trustee, as directed in writing by Issuer Order, but only in Investment Obligations maturing or redeemable at the option of the holder in such amounts and on such dates as may be necessary to provide moneys to meet the payments from such funds and accounts.

The Issuer shall be responsible for directing the investment of moneys held by the Trustee under the Indenture in accordance with the provisions thereof. In directing the investment of such moneys, the Issuer shall, in each case, certify to the Trustee that such investments constitute Investment Obligations, are permitted by applicable law and do not violate the covenants with respect to the excludability of interest on Tax-Exempt Bonds from gross income for purposes of federal income taxation. The Trustee shall not be responsible for determining whether any investment is authorized under any applicable law or the Indenture.

Subject to the provisions set forth below, interest earned, profits realized and losses suffered by reason of any investment of funds and accounts created by the Indenture shall be credited or charged, as the case may be, to the fund or account for which such investment shall have been made. Upon Issuer Order, interest earned from the investment of all or any portion of any money in the Redemption Fund shall be paid from the Redemption Fund to the Interest Account during any period set forth in such request.

Interest earned, profits realized and losses suffered by reason of any investment of the Debt Service Reserve Fund shall be determined by the Trustee on each date on which the Trustee is required to determine the value of the assets therein in accordance with the Indenture. If the net investment result therefor for any such period is a gain (by virtue of either interest earned or profits realized), the amount of such investment gain shall be credited to the Debt Service Reserve Fund to the extent that there exists a deficiency therein, and the balance of such investment gain, if any, shall be paid by the Trustee, but only to the extent realized, from time to time as follows: to the Debt Service Fund for deposit first in the Interest Account to the extent necessary to pay interest on the Bonds on the next succeeding interest payment date and second to the Principal Account to the extent necessary to pay principal of the Bonds on the next succeeding date on which principal of the Bonds is due (whether at maturity or by redemption), unless the Supplemental Indenture authorizing the issuance of any Additional Bonds shall otherwise provide.

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The Trustee may sell or redeem any obligations in which moneys shall have been invested to the extent necessary to provide cash in the respective funds or accounts to make any payments required to be made therefrom or to facilitate the transfer of moneys between various funds and accounts as may be required or permitted from time to time pursuant to the provisions of the Indenture. The proceeds from the sale of any investment shall be paid into the fund or account for which the sale thereof was made.

In determining the value of the assets of the Debt Service Reserve Fund, there shall be credited to the Debt Service Reserve Fund the amount that can be realized by the Trustee under any Debt Service Reserve Fund Credit Facility if each of the following conditions is met to the satisfaction of the Trustee: (i) on the date of delivery of such Debt Service Reserve Fund Credit Facility to the Trustee, the unsecured long-term indebtedness or the claims-paying ability of the issuer of such Debt Service Reserve Fund Credit Facility or its parent holding company or other controlling entity is rated by a Rating Agency in one of its two highest rating categories and throughout the period during which such Debt Service Reserve Fund Credit Facility is credited to the Debt Service Reserve Fund, such indebtedness or claims paying ability is rated by a Rating Agency in one of its three highest rating categories, as certified periodically to the Trustee by such issuer; (ii) such Debt Service Reserve Fund Credit Facility is free and clear of all liens and encumbrances superior to the Indenture, as certified to the Trustee by the issuer thereof; (iii) such Debt Service Reserve Fund Credit Facility permits the Trustee to realize amounts thereunder at such times as the Trustee is required to transfer any amount (other than any surplus) from the Debt Service Reserve Fund in accordance with the Indenture; (iv) if amounts realized under such Debt Service Reserve Fund Credit Facility are, under any circumstances, payable from the Revenues or are secured by any property of the Issuer, such amounts shall be payable in no fewer than 12 equal monthly installments; and (v) such Debt Service Reserve Fund Credit Facility is satisfactory in form and substance to the Principal Underwriters; provided, however, that the amount that can be realized by the Trustee under any Debt Service Reserve Fund Credit Facility shall not be credited to the Debt Service Reserve Fund on any date that is within six months of the expiration date of such Debt Service Reserve Fund Credit Facility unless such expiration date occurs after the maturity date of the Bonds secured thereby or the Debt Service Reserve Fund Credit Facility permits a draw in full prior to expiration.

Neither the Trustee nor the Issuer shall be liable for any depreciation in the value of any obligations in which moneys of the funds or accounts created by the Indenture shall be invested or for any loss arising from any investment permitted in the Indenture.

Rebate Fund; Monitoring and Payment of Rebate Amount

The Trustee shall establish the Rebate Fund on its books at such time as it is first determined by written notice from the Rebate Analyst to the Trustee and the Issuer that there are Excess Earnings. Any provision hereof to the contrary notwithstanding, amounts credited to the Rebate Fund shall be free and clear of any lien under the Indenture.

(i) The Issuer shall cause the Rebate Analyst to determine, within 60 days of the end of each Bond Year the amount required to be rebated to the United States Treasury pursuant to Section 148(f) of the Code, as calculated from the date of original delivery of the Bonds. Notwithstanding the foregoing, the Rebate Analyst shall not be required to make such determination, except as required in connection with making the payments to the United States Treasury as described in this paragraph, if during the preceding Bond Year there have been no investments made of amounts on deposit in any fund or account established under the Indenture in “nonpurpose investments” (as defined in Section 148(f)(6) of the Code) having a yield higher than the yield of the Bonds and the Rebate Analyst shall not be required to make such determination with respect to any portion of the Bonds which is exempt from rebate by virtue of any rebate exemption of Section 148 of the Code. The Issuer shall cause the Rebate Analyst to inform the Trustee in writing if no determination is required under these conditions.

(ii) The Trustee shall furnish such information as is reasonably requested to the Rebate Analyst to calculate, as soon as is practical after the end of each Bond Year for the Bonds and as soon as is practical after the payment in full of all outstanding Bonds, the amount of Excess Earnings as of the end of that Bond Year or the date of such final payment. If the amount then on deposit in the Rebate Fund is in excess of the Excess Earnings as determined by the Rebate Analyst and upon receipt of a copy of such Rebate Analyst’s report, the Trustee shall forthwith transfer that excess amount to the Revenue Fund. If the amount then on deposit in the Rebate Fund is less than such Excess Earnings, the Trustee, notwithstanding any other provision contained in the Indenture and without further authorization, shall immediately transfer to the Rebate Fund from any of the following funds, in the following order of priority, to the extent there are moneys available therein, an amount sufficient to cause the Rebate

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Fund to contain an amount equal to such Excess Earnings: the Surplus Fund, the Management Fees Fund, the Capital and Furnishings Fund, the Debt Service Reserve Fund, or the Debt Service Fund (from each account therein in the reverse order as set forth in the Indenture).

(iii) Within 60 days after the end of the fifth Bond Year and every fifth Bond Year thereafter, the Trustee shall pay to the United States in accordance with Section 148(f) of the Code from the moneys then on deposit in the Rebate Fund an amount equal to 90% (or such greater percentage not in excess of 100% as the Issuer or the Rebate Analyst may direct the Trustee to pay) of the Excess Earnings earned from the date of the original delivery of the Bonds to the end of such fifth Bond Year (less the amount of Excess Earnings, if any, previously paid to the United States pursuant to this Section), all as determined and directed by the Rebate Analyst in writing. Within 60 days after the payment in full of all outstanding Bonds, the Trustee shall pay to the United States in accordance with Section 148(f) of the Code from the moneys then on deposit in the Rebate Fund an amount equal to 100% of the Excess Earnings earned from the date of the original delivery of the Bonds to the date of such payment (less the amount of Excess Earnings, if any, previously paid to the United States pursuant to this paragraph), all as determined and directed by the Rebate Analyst in writing, and any moneys remaining in the Rebate Fund following such payment shall be transferred by the Trustee to the Revenue Fund. All computations of Excess Earnings as described in this paragraph shall treat the amount or amounts, if any, previously paid to the United States pursuant to the provisions described in this paragraph as amounts on deposit in the Rebate Fund.

Compliance with Applicable Governmental Standards and Requirements

The Issuer and the Property shall at all times comply in all material respects with all governmental standards and requirements applicable to the Issuer and the Property. The Issuer shall not recommend, agree to or permit any changes, revisions or modifications to the Property or the operation thereof or to the Plans and Specifications relating to the Project or to any Additional Projects that would in any way adversely affect compliance by the Issuer with such standards and requirements. The Issuer shall take any and all action necessary within a reasonable time of promulgation of any such standards or requirements hereafter imposed by the appropriate governmental body to ensure compliance with all such standards and requirements; provided, however, the Issuer shall have the right to contest the validity of such standards or requirements in good faith, so long as neither the security of the Deed of Trust nor the ability of the Issuer to comply with the provisions of the Issuer’s Documents is adversely affected thereby.

Amendment of the Project and Additional Projects

With the approval of the Ground Lessor, the Project and any Additional Projects may be amended, in order to increase or decrease the scope of the Project or such Additional Projects or to make changes within the Project or such Additional Projects as originally designed and planned; provided, however, that (i) any amendment is within the authority of the Issuer, (ii) the Project or any Additional Projects are expected to maintain or increase the Coverage Ratio at the level indicated in the Indenture as a result of any decrease in scope, (iii) prior to the implementation of any amendment, any additional moneys required to pay any Costs of the Project or any Additional Projects resulting from such amendment are made available by the Issuer as provided below, (iv) all applicable governmental approvals are obtained by the Issuer, and (v) if such amendment changes the scope or use of the Project or any Additional Projects, the Trustee receives an opinion of Bond Counsel to the effect that such amendment will not adversely affect the excludability from gross income, for federal income tax purposes, of interest paid on any Tax-Exempt Bonds theretofore issued; and provided further that if any amendment to the Project or any Additional Project is required by law, the Issuer shall not be required by the provisions of the Indenture to procure the approval of the Ground Lessor, nor shall the Issuer be required to comply with clause (ii) above in adopting any such amendment. The Issuer shall promptly furnish the Trustee with copies of any amendment entered into pursuant to the provisions of the Indenture.

The Issuer may make available such additional moneys to pay the Costs of the Project or any Additional Projects by (a) delivering cash or Government Obligations to the Trustee or (b) delivering to the Trustee irrevocable commitments, letters of credit or other evidence that moneys will be available when and if needed to pay such increased cost.

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Operation and Maintenance of Property; Expenses of Upkeep

The Issuer shall operate the Property, or cause the Property to be operated, in conformity with the Ground Lease and in a commercially reasonable manner and shall maintain, preserve and keep the Property in good condition and repair. The Issuer shall make, or cause to be made, all necessary and proper repairs, replacements and renewals so as to conduct the operation of the Property in accordance with all applicable governmental operating standards. The Issuer shall operate the Project and any Additional Projects financed with the proceeds of Bonds as facilities permitted to be financed and refinanced under the Act and/or any applicable federal law. The Issuer shall employ an Independent Engineer or Independent Architect to deliver to the Issuer and the Trustee, every three years, a recommendation based on the physical condition of the Property for adequate deposits to the Capital and Furnishings Fund for the next three succeeding Fiscal Years.

Subordination of Leases and Contracts

Except for the Ground Lease and Permitted Encumbrances, any lease, license or contract entered into with respect to any portion of the Property specifically by its terms shall be subordinate to the Deed of Trust and shall permit the Trustee upon the initiation of foreclosure of the Deed of Trust to terminate such lease, license or contract upon 30 days’ notice at any time with or without cause. Each lease, license or contract shall be subject to the terms of the Indenture and shall not relieve the Issuer of any of its obligations under the Indenture.

Limitations on Alteration of Property; Disposition of Equipment Collateral

The Issuer shall not make any change or alteration (including, without limitation, demolition or removal) to any portion of the Property or replace any portion of any structure or Equipment Collateral that constitutes a portion of the Property unless the Revenue Test shall have been satisfied after giving effect to such change, alteration or replacement and the written consent of the Ground Lessor is obtained; provided, however, the Issuer may remove and dispose of, free from the lien and security interest of the Deed of Trust and without satisfying the Revenue Test or obtaining consent of the Ground Lessor, such of the Equipment Collateral as from time to time may become useless, worn out or obsolete, provided that either (A) simultaneously with or prior to such removal, any such Equipment Collateral, if its function is still required for the operation of the Property, is replaced with other equipment of equal value or similar function or (B) if such Equipment Collateral has value, such Equipment Collateral is sold at fair market value for cash and the net cash proceeds received from such disposition are paid over promptly to the Trustee for deposit into the Redemption Fund.

Notwithstanding the provisions of the paragraph above, the Issuer shall be permitted to dispose of, remove or alter the Property as described above only if (i) at the time of such disposition, removal or alteration, no Event of Default shall have occurred and be continuing or (ii) such disposition, removal, alteration or addition will not materially impair the structural soundness or the operating efficiency and integrity of any material portion of the Property.

The net proceeds, if any, of any disposition, removal or alteration shall constitute Revenues. Any net proceeds in the form of cash, marketable securities or other liquid assets received by the Issuer from any disposition, removal or alteration shall be promptly paid over to the Trustee by the Issuer and identified to the Trustee by the Issuer for deposit into the Redemption Fund.

Required Insurance; Independent Insurance Consultant

The Issuer shall keep the Property, or cause the Property to be kept, insured at all times and shall maintain, or cause to be maintained, with responsible insurers with respect to the facilities and operations of the Property insurance of such types, in such amounts and against such risks as are customarily maintained for facilities of a comparable type and size and offering comparable services, including (without limitation) the following insurance to the extent that such insurance is customarily maintained: (i) full fire and extended coverage insurance on the Property providing for not less than full recovery of the replacement value of any damaged property; (ii) public liability and property damage insurance, including (without limitation) business automobile liability insurance and professional liability insurance in amounts estimated to fully indemnify (less reasonable deductibles and exclusions) the Issuer and the Trustee against the estimated loss or damage; and (iii) fidelity, comprehensive dishonesty, disappearance and destruction insurance. In addition, the Issuer shall obtain and maintain “use and occupancy” insurance or “business interruption” insurance covering the loss of revenues by reason of the total or partial suspension of or interruption in the operation of the Property caused by damage to or destruction of the Property in

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an amount not less than the amount required to meet the Debt Service Requirements of Outstanding Bonds for a period of one year.

Within 30 days before the beginning of each Fiscal Year thereafter, the Issuer shall employ an Independent Insurance Consultant to review the insurance coverage of, and the required insurance for, the Issuer with respect to the Property and shall furnish to the Trustee signed copies of the report of the Independent Insurance Consultant. Such report shall state whether, in the opinion of the Independent Insurance Consultant, the Issuer has satisfied the requirements of the Indenture as of the last day of such Fiscal Year and make recommendations, if any, respecting the types, amounts and provisions of insurance that should be carried with respect to the Property, the construction and acquisition of any Capital Improvements and the operation, maintenance and administration of the Property. The Issuer shall increase or otherwise modify the kinds and amounts of insurance maintained by the Issuer to the extent that such increase or modification is recommended by the Independent Insurance Consultant and results in substantially the same coverage as is customarily maintained by persons in similar circumstances having facilities of a comparable size and offering comparable services as those of the Issuer with respect to the Property.

The Issuer shall furnish, or cause to be furnished, to the Trustee complete copies of all policies of insurance carried with respect to the Property and the operation, maintenance and administration thereof, and all certificates of insurance reflecting such policies. If any change occurs in any such insurance coverage, the Issuer shall so notify the Trustee, or cause the Trustee to be notified, at the time of such change. The Issuer shall deliver, or cause to be delivered, to the Trustee certificates of renewal of any insurance at least 30 days prior to the expiration of any policy of insurance.

Application of Proceeds of Condemnation and Insurance; Extraordinary Redemption of Bonds

The Issuer shall pay over to the Trustee as a Depository (as defined in the Ground Lease) under the Ground Lease, and identify for deposit in the Insurance and Condemnation Award Fund (i) all proceeds received under any title insurance policy relative to any Property (“title insurance proceeds”), (ii) the proceeds of any Property taken in the exercise of the power of eminent domain, condemnation or through the exercise of any right or any obligation on the part of any public authority to purchase the same, or as a result of any agreement between the Issuer and the State (“condemnation proceeds”), and (iii) any insurance proceeds payable in connection with the loss, damage or destruction of any Property (“casualty insurance proceeds”).

Title insurance proceeds, casualty insurance proceeds or condemnation proceeds paid to the Trustee shall be applied in accordance with the Ground Lease, to the curing of title defects, to the extent curable, or to the repair or replacement of the lost, damaged, destroyed or taken property, unless the University directs the Issuer in writing to apply such proceeds to the redemption of Bonds.

The proceeds of any use and occupancy or business interruption insurance policy representing the coverage of the Debt Service Requirements of any Bonds shall be paid to the Trustee for deposit in the Revenue Fund and applied as described above under “Deposit of Revenues; Deposit of Certain Proceeds.”

The Issuer shall be entitled to adjust losses under property and business interruption insurance policies related to the Property, in conformity with the Indenture, as promptly as practicable and with due regard to the interests of the Trustee and the Bondholders. The Trustee shall have no duty to participate in such adjustment or to review the same. Any adjustment of any loss, damage or destruction in an amount in excess of $250,000 under any policy of casualty insurance and any settlement or payment of indemnity in an amount in excess of $250,000 under any such policy shall be evidenced by an appropriate certificate, filed with the Trustee, signed by an Authorized Officer of the Issuer.

If an Event of Default shall have occurred and be continuing, then the casualty insurance proceeds, condemnation proceeds and title insurance proceeds shall be applied to the payment of the Bonds, unless a majority of the Holders of the Bonds direct otherwise.

Partial Release of Liens

The Trustee, at the expense of the Issuer, shall execute and deliver any instrument necessary or appropriate to confirm, grant or convey any property or interest therein transferred as described above under “Limitations on Alterations of the Property; Disposition of Equipment Collateral” and to release such property or interest therein from the liens and security interests granted to the Trustee as security for Outstanding Bonds.

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Release of Phase I Project; Release of Phase II Project

Upon Issuer Order, at the direction of the Ground Lessor and upon the satisfaction of the conditions in the Ground Lease and the Deed of Trust, the Trustee will release the Phase I Project and the Phase II Project from the lien of the Deed of Trust and will release the Revenues with respect to either the Phase I Project or the Phase II Project, as applicable, from the lien of the Indenture. See “THE GROUND LEASE – Partial Termination of Ground Lease” in this Official Statement, and “SUMMARY OF CERTAIN PROVISIONS OF THE DEED OF TRUST – Transfer of Property” below.

Preservation of Qualifications

The Issuer shall not allow any permit, right, franchise or privilege so long as it is necessary for the ownership or operation of the Property as a student housing facility to lapse or be forfeited.

Annual Audit of Issuer; Quarterly Financial Reports

Within 120 days of the end of each Fiscal Year, the Issuer shall cause financial statements of the Issuer with respect to the Property to be prepared with respect to such Fiscal Year in accordance with generally accepted accounting principles, consistently applied, which financial statements shall be audited by, and accompanied by a report of, an Independent Public Accountant. Such financial statements and reports shall be delivered upon completion, but in no event more than 180 days after the end of each Fiscal Year, to the Trustee, the Dissemination Agent, any Rating Agency then maintaining a rating on the Bonds and the Ground Lessor.

For each Fiscal Quarter, the Issuer shall submit to the Trustee, the Dissemination Agent, any Rating Agency then maintaining a rating on the Bonds, and the Ground Lessor within 45 days of the last day of each Fiscal Quarter copies of the unaudited financial statements of the Issuer for the Property for such Fiscal Quarter, together with a certificate of an Authorized Officer of the Issuer indicating whether or not the Issuer is expected to be in compliance with the Revenue Covenant at the end of the then current Fiscal Year, given the Budget then in effect and the Project’s financial performance during the portion of the Fiscal Year addressed by such financial statements.

The Trustee shall act only as a repository for, and shall have no obligation to review, or take any action in respect of, any financial statements submitted by the Issuer.

Issuer to Pay Impositions and Maintain Tax Exemptions

The Issuer shall pay, prior to the accrual of any interest or penalties thereon, all governmental impositions (including, without limitation, taxes of every kind and nature whatsoever) and assessments, if any, lawfully levied or assessed upon or in respect of the Property, or upon any part thereof or upon any revenue therefrom, all ground rents (other than rent owed under the Ground Lease, the payment of which is described under “SECURITY AND SOURCES OF PAYMENT FOR THE SERIES 2013 BONDS – Surplus Fund” in this Official Statement) if any, on the Property and all costs of operating, maintaining, repairing and replacing the Property and its equipment. The Issuer shall file any and all certificates or other documents required by law to obtain (to the extent it might be or become necessary) and maintain in full force and effect any and all available tax exemptions applicable to the Property (and any portion thereof), to the Issuer and to any income, receipts and other taxable item or event derived from or attributable to the Property. The Issuer may contest in good faith any governmental imposition or assessment with respect to the Property, provided that such contest shall not materially adversely affect the security for the Bonds or the effective use or operation of the Property.

Liens and Encumbrances; Further Assurances by Issuer

Except as otherwise specifically permitted by the Indenture, the Issuer shall neither create any lien or encumbrance nor allow any lien to remain against any portion of the Property or the Revenues (except Permitted Encumbrances).

Issuer to Prepare Budget

On or before January 2nd of each year, the Issuer shall prepare and cause to be delivered to the Trustee and the University an initial written annual budget in connection with the operation of the Property for the next Fiscal Year, which Budget shall be subject to adjustment as further provided in the Management Agreement, and which Budget shall contain monthly estimates of expenses, capital requirements and cash flow of the Issuer with respect to

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the Property and its obligations with respect to outstanding Indebtedness of the Issuer related to the Property. Such Budgets shall designate separately payments in respect of the Debt Service Requirements on all outstanding Bonds and all amounts due with respect to the Administrative Expenditures, the Issuer’s Annual Fee and the Management Fees during each Fiscal Year. The amount of fees, rentals, rates and charges set forth in each Budget for each Fiscal Year thereafter shall be sufficient to enable the Issuer to meet the Revenue Covenant to the maximum extent feasible.

Any Budget delivered to the Trustee and the Ground Lessor shall be accompanied by a written certification that such Budget provides for the satisfaction of the Revenue Covenant for the Fiscal Year covered by such Budget. If the Issuer is unable to give such certification, it shall notify the Trustee and the Ground Lessor that the Revenue Covenant will not be met and that it intends to retain a Management Consultant as provided in the Indenture. The Trustee shall act only as a repository for, and shall have no obligation to review, or take any action in respect of, any Budget submitted by the Issuer pursuant to the provisions summarized in this paragraph.

If the Budget for any Fiscal Year does not provide for the satisfaction of the Revenue Covenant in such Fiscal Year, the Issuer shall promptly employ a Management Consultant to submit a written report and recommendations with respect to the fees, rentals, rates and charges to be imposed and collected by the Issuer in connection with its operation of the Property under such Budget and with respect to improvements or changes in the operations or management of the Property or the services rendered by the Issuer in such Fiscal Year. The Issuer shall require any Management Consultant employed under the Indenture to file its report and recommendations within 150 days from the adoption or implementation of such Budget with the Trustee, the Ground Lessor and any Bondholders that shall have filed with the Issuer a written request therefor.

Any Management Consultant may recommend (with respect to the fees, rentals, rates or other charges to be imposed by the Issuer and with respect to improvements or changes in the operations or management of the Property or the services rendered by the Issuer) that the Issuer either (i) make no change, or (ii) make some change, even though such recommendation is not calculated to result in compliance with the Revenue Covenant if, in the opinion of such Management Consultant, compliance with such recommendation should result in compliance with the Revenue Covenant to the maximum extent feasible.

Upon receipt of the Management Consultant’s report, the Issuer promptly shall revise or cause to be revised the fees, rentals, rates and charges for use of the Property and services provided or to be provided in connection therewith by the Issuer in conformity with any lawful recommendation of the Management Consultant retained pursuant to the Indenture and shall otherwise follow the recommendations of such Management Consultant. If the Issuer shall revise such fees, rentals, rates and charges in conformity with the recommendations of the Management Consultant and otherwise follow such recommendations of the Management Consultant, then the failure to meet the Revenue Covenant for such Fiscal Year shall not constitute an Event of Default under the Indenture. If approvals of any regulatory or supervisory authority are required in order to fix, charge, collect and otherwise implement any fees, rentals, rates and charges required under the Indenture, the Issuer shall take all action within its power to obtain such approvals in an expeditious manner.

Any Budget may be amended as provided in the Ground Lease and any amendment shall be promptly delivered to the Trustee.

Management

The Issuer agrees to employ at all times a Manager for the Property throughout the term of the Bonds. The Issuer has entered the Management Agreement with EDR Management Inc.

Any future Management Agreement shall not become effective unless (i) the Issuer shall have received the written approval of the Ground Lessor (which approval shall include a statement that the Management Fees provided for in such Management Agreement comply with the terms of the Ground Lease) and (ii) the Issuer delivers to the Trustee a copy of the written approval described in clause (i) and an opinion of Bond Counsel stating that such management agreement will not adversely affect (a) the exclusion of the interest payable on the Tax-Exempt Bonds from the gross income of the Holders thereof for purposes of federal income taxation pursuant to Section 103 of the Code, and (b) the exemption of the Bonds from state, county and municipal taxation in the State.

The Issuer shall not make any material change in any Management Agreement or terminate any Management Agreement without the written consent of the Ground Lessor, unless such change or termination is

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recommended by a Management Consultant. Upon the failure of the Issuer to procure such consent, if required, the Ground Lessor may require the Issuer to terminate such Management Agreement and enter into a new Management Agreement.

If (i) any Manager fails to follow the recommendations of a Management Consultant required of the Manager by the Issuer in accordance with the provisions of the Indenture; (ii) the Revenue Covenant is not satisfied for two consecutive Fiscal Years; or (iii) the Manager fails to comply with any material terms of the Management Agreement, the Issuer may remove the then current Manager and enter into a Management Agreement with a new Manager.

Management Consultant

The Issuer shall employ a Management Consultant as required by certain provisions of the Indenture.

If the Issuer fails to appoint a Management Consultant or deliver a report as required by the Indenture in connection with the failure to apply title insurance, casualty insurance or condemnation proceeds or the failure to comply with the Revenue Covenant, the Trustee, upon notice to the Issuer and as directed by a majority of the Holders of the Bonds, shall retain a Management Consultant for the account and at the expense of the Issuer.

The Issuer shall not be required to implement any recommendation contained in the report of a Management Consultant that (i) conflicts with law or existing contracts that cannot be terminated, or (ii) the Issuer has determined to be unreasonable, impractical or unfeasible, nor shall the Issuer be obliged to implement any such recommendation, if, in the reasonable judgment of the Management Consultant (which shall be reduced to writing and furnished to the Trustee), such failure to concur with or to implement such recommendation will not prevent the implementation of other recommendations that are sufficient in the aggregate to enable the Issuer to rectify, within a reasonable period of time, the circumstance giving rise to employment of such Management Consultant.

Permitted Indebtedness

The Issuer shall not directly or indirectly create, incur, assume, guaranty or otherwise become contingently or otherwise liable with respect to any Indebtedness other than Permitted Indebtedness.

Authorization of Additional Bonds

The Issuer may issue, from time to time, Additional Bonds under and secured by the Indenture for the following purposes: (i) refunding or advance refunding any Outstanding Bonds; (ii) obtaining funds necessary to complete the acquisition, construction, furnishing or equipping of the Project or any Additional Projects; and (iii) obtaining funds to finance or refinance the costs of acquisition, construction, furnishing or equipping of Additional Projects; provided, however, that the Issuer may not issue Additional Bonds for the purpose described in clause (i) above, unless the Ground Lessor consents to such issuance and the Maximum Annual Debt Service on such Additional Bonds will not exceed the Maximum Annual Debt Service on the Bonds to be refunded (as evidenced by a certificate of the Principal Underwriters for the Additional Bonds) (the “Maximum Annual Debt Service Certificate”); and provided, further, however, that the Issuer may not issue Additional Bonds for the purpose described in clause (iii) unless the Ground Lessor consents to such issuance and the Revenue Test is satisfied. In addition, no Additional Bonds may be issued unless there is delivered to the Trustee a letter from each Rating Agency then maintaining a rating on the Bonds confirming that the rating on the Bonds in light of the issuance of such Additional Bonds shall not be reduced or withdrawn. The costs to be incurred by the Issuer in connection with the issuance and sale of any such Additional Bonds, the establishment of necessary reserves and the payment of interest prior to and during construction and (if deemed advisable by the Principal Underwriters) for a limited period after the completion of the Project or any such Additional Projects shall be included within each of the foregoing authorized purposes. The issuance of Additional Bonds shall be authorized by a Supplemental Indenture of the Issuer. Each Series of Additional Bonds issued shall be on a parity with and shall be entitled to the same benefit and security of the Indenture, including (without limitation) the pledge of the Revenues made by the Indenture, as the Series 2012 Bonds, the Series 2013 Bonds and any other Series of Additional Bonds that may be issued from time to time.

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Registration and Exchange of Bonds

The Bonds shall be negotiable instruments for all purposes and shall be transferable by delivery, subject only to the provisions for registration and registration of transfer endorsed on the Bonds. The Issuer shall cause books for registration and the registration of transfer of the Bonds to be prepared. The registration books shall be maintained by the Registrar. The holder of any Bond may register such Bond only upon such books.

If any Bond is surrendered to the Trustee at its Corporate Trust Office for transfer or exchange in accordance with the provisions of such Bond and the Indenture, the Issuer shall execute and the Trustee shall authenticate and deliver in exchange for such Bond a new Bond or Bonds of the same Series, in Authorized Denominations, bearing interest at the same rate and having the same stated maturity date, in aggregate principal amount equal to the principal amount of the Bond so surrendered, upon reimbursement to the Issuer or the Trustee of an amount equal to any tax or other governmental charge, shipping charges and insurance required to be paid with respect to such exchange. Neither the Issuer nor the Trustee nor the Registrar shall be required to register the transfer of any Bond or make any such exchange of any Bond after such Bond or any portion thereof has been selected for redemption.

By acceptance of any Bond, the Holder thereof agrees to indemnify the Issuer, the Trustee, the Registrar and the Paying Agent against any liability that may result from the transfer, exchange or assignment of such Holder’s Bond in violation of any provision of the Indenture and/or applicable United States federal or state securities law. The Trustee, the Registrar and the Paying Agent shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under the Indenture or under applicable law with respect to any transfer of any interest in any Bond other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, the Indenture, and to examine the same to determine substantial compliance as to form with the express requirements thereof.

Modification or Amendment of the Indenture and Deed of Trust

Without notice to or the consent of the Holders of any of the Bonds, but with the consent of the University, the Issuer and the Trustee may, from time to time and at any time, enter into a Supplemental Indenture supplementing, modifying or amending the Indenture or any Supplemental Indenture for one or more of the following purposes: (a) to grant to or confer upon the Trustee for the benefit of the Holders of the Bonds any additional rights, remedies, powers, authority or security that may lawfully be granted to or conferred upon the Trustee for the benefit of such Holders; (b) to add to the covenants and agreements of the Issuer contained in the Indenture, other covenants and agreements thereafter to be observed relative to the acquisition, construction, equipping, operation, maintenance, development or administration of the Property, or relative to the application, custody, use or disposition of the proceeds of the Bonds; (c) to surrender any right, power or privilege reserved to or conferred upon the Issuer by the Indenture; (d) to confirm, as further assurance, any pledge under, and the subjection to any lien on, or claim or pledge of (whether created or to be created by the Indenture), the Revenues; (e) to cure any ambiguity or to cure or correct any defect or inconsistent provisions contained in the Indenture or to make such provisions in regard to matters or questions arising under the Indenture as may be necessary or desirable and not contrary to or inconsistent with the Indenture; (f) to authorize the issuance of Additional Bonds, including (without limitation) any modifications or amendments required to grant to or otherwise secure for the Holders of such Additional Bonds a parity interest in the security granted to the Holders of the Series 2012 Bonds, the Series 2013 Bonds and any other then Outstanding Bonds; (g) to permit the qualification of the Indenture or any Supplemental Indenture under any federal statute now or hereafter in effect or under any state blue sky law and, in connection therewith, to add to the Indenture or any Supplemental Indenture such other terms, conditions and provisions as may be permitted or required by such federal statute or state blue sky law, if any such Supplemental Indenture has no materially adverse effect upon Holders of the Series 2012 Bonds or the Series 2013 Bonds; (h) to obtain or to maintain any ratings on the Bonds from any nationally recognized securities rating agency, if any such Supplemental Indenture has no materially adverse effect upon Holders of the Series 2012 Bonds or the Series 2013 Bonds; (i) to make any other change in the Indenture, that the Trustee determines (which determination may be made in reliance on an opinion of Independent Counsel) shall not prejudice in any material respect the rights of the Holders of the Bonds Outstanding at the date as of which such change shall become effective; (j) to provide for the issuance of certificated Bonds or Bonds in Book-Entry form; or (k) to preserve the excludability from gross income for federal income tax purposes of the interest paid on any Tax-Exempt Bonds theretofore issued.

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Before the Issuer and the Trustee enter into any Supplemental Indenture permitted above, there shall have been delivered to the Trustee and the Issuer the written approval of the University to such Supplemental Indenture and an opinion of Bond Counsel stating that such Supplemental Indenture is authorized or permitted by the Indenture and the Act, complies with their respective terms, will, upon the execution and delivery thereof, be valid and binding upon the Issuer in accordance with its terms and will not adversely affect (i) the exclusion of the interest payable on the Tax-Exempt Bonds from the gross income of the Holders of the Tax-Exempt Bonds for purposes of federal income taxation pursuant to Section 103 of the Code, and (ii) the exemption of the Bonds from state, county and municipal taxation in the State.

The Issuer shall not be required to enter into any Supplemental Indenture that adversely affects its interests.

The Trustee may, but shall not be obligated to, enter into any Supplemental Indenture which affects the Trustee’s own rights, duties or immunities under the Indenture or otherwise.

In addition to Supplemental Indentures permitted above, with the prior written consent of the majority of Bondholders and the University, the Issuer and the Trustee may, at any time and from time to time, enter into Supplemental Indentures amending or supplementing the Indenture, any Supplemental Indenture or any Bond to modify any of the provisions thereof or to release the Issuer from any of the obligations, covenants, agreements, limitations, conditions or restrictions therein contained; provided, however, that nothing contained in the Indenture shall permit (i) a change in any terms of redemption or purchase of any Bond, the due date for the payment of the principal of or interest on any Bond or any reduction in the principal, Redemption Price or purchase price of or interest on any Bond without the consent of the Holder of such Bond or (ii) except as expressly permitted by the Indenture, the creation of a claim or lien upon, or a pledge of, the Revenues ranking prior to or on a parity with the claim, lien and pledge created by the Indenture, a preference or priority of any Bonds over any other Bonds or a reduction in the percentage of Outstanding Bonds the consent of the Holders of which is required for any modification of the Indenture, without the unanimous consent of the Holders of all Outstanding Bonds, except that during any period of time in which an Event of Default has occurred and is continuing, the consent of only 66-2/3% of the Holders of all Outstanding Bonds shall be required for any of the foregoing as such action relates to the Outstanding Bonds, other than a change in the percentage of Bonds the consent of the Holders of which is required for modification of the Indenture.

If at any time the Issuer requests the Trustee to enter into any Supplemental Indenture for any of the purposes described in the preceding paragraph, the Trustee shall cause notice of the proposed Supplemental Indenture to be given by mail to all Holders of Outstanding Bonds. Such notice shall contain a brief statement prepared by the Issuer setting forth the nature of the proposed Supplemental Indenture and shall state that a copy thereof is on file at the principal office of the Trustee for inspection by all Holders of Bonds. The Issuer and the Trustee may enter into such Supplemental Indenture in substantially the form described in such notice, after receipt by the Trustee of (i) the required consents, in writing, of Holders of Bonds, as applicable, (ii) the written approval of the University to such Supplemental Indenture and (iii) an opinion of Bond Counsel stating that such Supplemental Indenture is authorized or permitted by the Indenture and the Act, complies with their respective terms and, upon the execution and delivery thereof, will be valid and binding upon the Issuer in accordance with its terms and will not adversely affect (i) the exclusion of the interest payable on the Tax-Exempt Bonds from the gross income of the Holders of the Tax-Exempt Bonds for purposes of federal income taxation pursuant to Section 103 of the Code, and (ii) the exemption of the Bonds from state, county and municipal taxation in the State. If Holders of not less than the required percentage of the aggregate principal amount of Bonds shall have consented to and approved the execution and delivery of such Supplemental Indenture, no Holder of Bonds shall have any right to object to the execution and delivery of such Supplemental Indenture, or to object to any of the terms and provisions contained therein or the operation thereof, or in any manner to question the propriety of the execution and delivery thereof, or to enjoin or restrain the Issuer or the Trustee from executing and delivering the same or from taking any action pursuant to the provisions thereof.

Without notice to or the consent of the Holders of any of the Bonds, (a) the Trustee and the Issuer may, with the consent of the University and the System to the extent required by the Ground Lease, at any time and from time to time, enter into any amendment, change or modification of the Deed of Trust and (b) the parties to the Ground Lease and each Permitted Leasehold Mortgagee (as defined in the Ground Lease) may, at any time and from time to time, enter into any amendment, change or modification of the Ground Lease, in either case that is: (i) required or permitted by the provisions of the Ground Lease or the Deed of Trust, (ii) required to cure any ambiguity

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or formal defect or omission therein, (iii) permitted by the Indenture with respect to amendments of the Project or any Additional Projects, (iv) required or permitted pursuant to the provisions of the Indenture in connection with the issuance of any Additional Bonds, (v) required to extend the term of the Ground Lease or any permitted renewal thereof, (vi) required to modify, add to or delete any provisions of the Ground Lease relating to required insurance if an independent insurance consultant to the Issuer determines that the insurance requirements as modified are adequate, (vii) required to modify the definition of Permitted Expenses as set forth in the Ground Lease, (viii) necessary to permit or provide for the application of any moneys which would otherwise constitute Annual Rent under the Ground Lease for any other purpose, (ix) necessary to modify, add to or delete any provisions of the Ground Lease relating to the Operating Reserve Fund or the Lessee’s Contingency Fund created under the Ground Lease, (x) necessary to modify in any respect the provisions of the Ground Lease relating to the minimum requirements applicable to the Manager, (xi) so long as the State of Maryland is the Ground Lessor, necessary to modify, add to or delete from the Ground Lease any other provision which the Ground Lessor and the Issuer determine in good faith will not materially impair the security for or prospect of payment of the Bonds or any extension, refinancing, replacement or successor financing to the Initial Financing (as defined in the Ground Lease) approved by the Ground Lessor and the Issuer, provided that the State of Maryland Board of Public Works has approved such modification, addition, deletion or other change to the Ground Lease, and provided further that no modification, addition, deletion or other change shall be made to the provisions of the Ground Lease unless the Permitted Leasehold Mortgagee consents thereto or such modification, addition or other change adds to the rights of the Permitted Leasehold Mortgagee, or (xii) not prejudicial in any material respect to the rights of the Holders of Bonds in the judgment of the Trustee.

Before the Trustee and the Issuer enter into any modification, alteration, amendment or supplement to (a) the Deed of Trust as described in the paragraph above, there shall have been delivered to the Issuer and the Trustee an opinion of Bond Counsel stating that such modification, alteration, amendment or supplement is authorized or permitted by the Indenture and the Act, complies with their respective terms, will, upon the execution and delivery thereof, be valid and binding upon the Issuer in accordance with its terms and will not adversely affect (i) the exclusion of the interest payable on the Tax-Exempt Bonds from the gross income of the Holders of the Tax-Exempt Bonds for purposes of federal income taxation pursuant to Section 103 of the Code or (ii) the exemption of the Bonds from state, county and municipal taxation in the State, or (b) the Ground Lease as described in the paragraph above, there shall have been delivered to the Issuer and the Trustee an opinion of Bond Counsel to the System stating that such modification, alteration, amendment or supplement is authorized or permitted by the Indenture, the Act and the Ground Lease, complies with their respective terms, will, upon the execution and delivery thereof, be valid and binding upon the Issuer in accordance with its terms and will not adversely affect (i) the exclusion of the interest payable on the Tax-Exempt Bonds from the gross income of the Holders of the Tax-Exempt Bonds for purposes of federal income taxation pursuant to Section 103 of the Code or (ii) the exemption of the Bonds from state, county and municipal taxation in the State

Except as provided above, neither the Issuer nor the Trustee shall enter into any amendment, change or modification of the Deed of Trust without either the prior written consent of a majority of Bondholders at the effective date of such amendment, change or modification

Events of Default and Remedies


Each of the following events is an Event of Default under the Indenture:

(a) payment of the principal or Redemption Price of any Bond shall not be made when the same shall become due and payable, either at maturity or by proceedings for redemption or otherwise; or payment of the purchase price of any Bond required by its terms to be purchased from the Holder thereof by the Trustee on any date prior to its stated maturity shall not be made in accordance with the terms thereof on such date; or

(b) payment of interest on any Bond shall not be made when the same shall become due and payable; or

(c) an order or decree shall be entered with the consent or acquiescence of the Issuer appointing a receiver of the Revenues, or such order or decree, having been entered without the consent or

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acquiescence of the Issuer, shall not have been vacated or discharged or stayed on appeal within 60 days after the entry thereof; or

(d) the Issuer shall default in the due and punctual performance of any of the covenants, conditions, agreements and provisions (other than as specified in clause (a) or (b) above) contained in any Bond or in the Indenture on the part of the Issuer to be performed, which default should continue for 30 days after the Issuer has actual knowledge of such failure, unless such failure is capable of being remedied and the Issuer is diligently attempting to remedy such failure, in which case the period of time permitted for a cure shall be extended to 90 days or such longer period of time as may be required for such cure so long as the failure to cure will not have a material adverse effect on the Property; or

(e) an “Event of Default” occurs under the Deed of Trust (as that term is defined therein); or

(f) the Ground Lease is terminated.

Subject to any cure rights of the University described below, upon the happening and continuance of any Event of Default described above, the Trustee may, and upon the written request of (i) a majority of Bondholders with respect to an Event of Default described in (a), (b), (c) or (f) above, or (ii) 85% of the Bondholders with respect to any other Event of Default, shall, by notice in writing to the Issuer, declare the principal of all Bonds Outstanding to be due and payable. Notwithstanding the foregoing, the Trustee may not declare the principal of any Series of Bonds other than the Series 2012 Bonds and the Series 2013 Bonds to be due and payable without the prior written consent of any person whose consent shall be required for such declaration under the terms of the Supplemental Indenture authorizing the issuance of such Series of Bonds.

At the expiration of 30 days from the giving of notice of such declaration, such principal shall become and be immediately due and payable, anything in the Bonds or the Indenture to the contrary notwithstanding. At any time after the principal of any Bonds shall have been so declared to be due and payable, and before the entry of final judgment or decree in any suit, action or proceeding instituted on account of such Event of Default, or before the completion of the enforcement of any other remedy under the Indenture, the Trustee may (but in the event that such declaration has been made upon the request of the Bondholders, only with the written consent of not less than a majority of the Bondholders), by written notice to the Issuer, annul such declaration and its consequences if: (i) moneys shall have accumulated in the Debt Service Fund sufficient to pay all arrears of interest, if any, upon all of the Outstanding Bonds (except the interest accrued on such Bonds since the last interest payment date) and the principal of all matured Bonds (except the principal of any Bonds due only as a result of such declaration); (ii) sufficient moneys shall have accumulated and be available to pay the charges, compensation, expenses, disbursements, advances and liabilities of the Trustee; and (iii) every other Event of Default in the observance or performance of any covenant, condition or agreement contained in the Bonds, the Indenture and the Deed of Trust of which the Trustee has actual knowledge shall have been remedied to the satisfaction of the Trustee. No such annulment shall extend to or affect any subsequent default or impair any right consequent thereon.

The Issuer may take any action, to the extent permitted by applicable law, to remedy any Event of Default.

Subject to any cure rights of the University described below under “Cure Rights of the University,” upon the happening and continuance of any Event of Default, then and in every such case the Trustee may proceed, and upon the written request of not less than a majority of the Bondholders shall proceed, to protect and enforce its rights and the rights of the Holders of the Bonds under the laws of the State and under the Indenture, the Deed of Trust, any other Bond Documents and any Credit Facility by such suits, actions or special proceedings in equity or at law, either for the specific performance of any covenant contained in the Indenture or therein, or in aid or execution of any power granted under the Indenture or therein granted, or for the enforcement of any Bond Documents or any proper legal or equitable remedy as the Trustee shall deem most effectual to protect and enforce such rights.

In the enforcement of any remedy under the Indenture, the Trustee shall be entitled to sue for, enforce payment of and receive any and all amounts then or during any default becoming, and at any time remaining, due from the Issuer for principal of or interest on the Bonds, or otherwise under any of the provisions of the Indenture or of any Bond, with interest on overdue payments of principal at the rate or rates of interest specified in the Bonds, together with any and all costs and expenses of collection and of all proceedings under the Indenture and under the Bonds, without prejudice to any other right or remedy of the Trustee or of the Bondholders, and to recover and enforce judgment or decree against the Issuer, but solely as provided in the Indenture and in the Bonds and from the

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sources and moneys provided in the Indenture and in the Bonds, for any portion of such amounts remaining unpaid and to collect in any manner provided by law the moneys adjudged or decreed to be payable.

Foreclosure of Deed of Trust and Sale

Subject to any rights of the Ground Lessor under the Ground Lease, upon the occurrence of an Event of Default, the Trustee shall have the right to foreclose on the Issuer’s leasehold interest in the Land and fee simple interest in the Project and any Additional Project subject to the Deed of Trust. Upon foreclosure, the Trustee shall sell such interests upon such terms as shall be satisfactory to the Trustee and receive the proceeds of the sale thereof, and the Issuer shall thereupon have no right to repossess the Property. For the purpose of sale, the Trustee shall be authorized to make such repairs or alterations in or to the Property as may be necessary to place the same in good order and condition. The Issuer shall be liable to the Trustee for the cost of such repairs or alterations and all expenses of any sale.

Priority of Payments following Default

If at any time there shall have occurred and be continuing an Event of Default, after payment of all Administrative Expenditures, and all other amounts provided for in the Deed of Trust before the payment of the Bonds, if applicable, all amounts held by the Trustee (including any amounts in the Operating Account and the Operating Carryover Account, and any amounts in the Security Deposit Account to the extent available but excluding amounts in the Revenue Fund to the extent they are needed to pay the Rebate Amount) together with any moneys thereafter becoming available for such purpose, whether through the exercise of the remedies provided above or otherwise, shall be deposited into the Revenue Fund and shall be applied as follows:

(a) unless the principal of all Outstanding Bonds shall have become or shall have been declared due and payable, all such moneys shall be applied:

FIRST: to the payment to the persons entitled thereto of all installments of interest then due on the Outstanding Bonds in the order in which such installments became due and payable and, if the amount available shall not be sufficient to pay in full any particular installment, then to the payment of such installment, ratably, according to the amounts due on such installment, to the persons entitled thereto, without any discrimination or preference, except as to any difference in the respective rates of interest specified in such Bonds;

SECOND: to the payment to the persons entitled thereto of the unpaid principal of any Outstanding Bonds that shall have become due and payable, in the order of the due dates of such Bonds, with interest upon the principal amount of such Bonds from the respective dates upon which they shall have become due and payable and, if the amount available shall not be sufficient to pay in full the principal of such Bonds due and payable on any particular date, together with such interest, then first to the payment of such interest, ratably, according to the amount of interest due on such date, and then to the payment of such principal, ratably, according to the amount of principal due on such date, to the persons entitled thereto, without any discrimination or preference, except as to any difference in the respective rates of interest specified in such Bonds;

THIRD: to the payment of the interest on and the principal of the Outstanding Bonds as the same become due and payable; and

(b) if the principal of all Outstanding Bonds shall have become due by their terms or the principal of all Outstanding Bonds subject to acceleration shall have become due and payable by a declaration of acceleration, all such moneys shall be applied to the payment of the principal and interest then due and unpaid upon the Bonds without preference or priority of principal over interest or of interest over principal, or of any installment of interest over any other installment of interest, or of any Bonds over any other Bonds, ratably, according to the amounts due respectively for principal and interest, to the persons entitled thereto, without any discrimination or preference except as to any difference in the respective rates of interest specified in such Bonds.

Amounts on deposit in the Construction Fund, the Debt Service Fund, the Debt Service Reserve Fund, the Capital and Furnishings Fund, the Management Fees Fund, the Surplus Fund, the Insurance and Condemnation Award Fund, and the Redemption Fund and the investment earnings on such amounts shall be applied to the payment of amounts due on all Outstanding Bonds until paid in full; and amounts on deposit in any debt service

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fund, debt service reserve fund, redemption fund or other similar fund created for any Bonds shall be applied in accordance with the Supplemental Indenture approving the issuance thereof. Notwithstanding the foregoing, any amount on deposit in any fund or account securing any Tax-Exempt Bond constituting proceeds of such Tax-Exempt Bond or investment earnings on such proceeds shall be applied solely to the payment of amounts due on such Tax-Exempt Bonds.

Whenever moneys are to be applied by the Trustee, such moneys shall be applied by the Trustee at such times, and from time to time, as the Trustee in its sole discretion shall determine, having due regard to the amount of such moneys available for application and the likelihood of additional moneys becoming available for such application in the future. The setting aside of such moneys in trust for the benefit of Holders of the applicable Series of Bonds shall constitute proper application by the Trustee, and the Trustee shall incur no liability whatsoever to the Issuer, to any holder of any Bond or to any other person for any delay in applying any such moneys, so long as the Trustee acts with reasonable diligence, having due regard to the circumstances, and ultimately applies the same in accordance with such provisions of the Indenture as may be applicable at the time of application by the Trustee. Whenever the Trustee shall exercise such discretion in applying such moneys, it shall fix the date (which shall be an interest payment date for the Bonds unless the Trustee shall deem another date more suitable) upon which such application is to be made, and upon such date interest on the amounts of principal of the Bonds to be paid on such date shall cease to accrue. The Trustee shall give such notice as it may deem appropriate of the fixing of any such date; provided, however, that the provisions of this paragraph shall be subject in all respects to the provisions of the Bonds with respect to the payment of defaulted interest on the Bonds. The Trustee shall not be required to make payment to the holder of any Bond unless such Bond shall be presented to the Trustee for appropriate endorsement or cancellation.

Discontinuance of Proceedings

In case any proceedings taken by the Trustee or the Holders of the Bonds on account of any Event of Default with respect to the Bonds shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Trustee or such Holders, then and in every such case the Issuer, the Trustee and the Holders shall be restored to their former positions and rights under the Indenture, and all rights, remedies, powers and duties of the Trustee shall continue as though no such proceeding had been taken.

Majority of the Bondholders May Control Proceedings

The majority of Bondholders shall have the right, by an instrument in writing executed and delivered to the Trustee, to direct the method and place of conducting all remedial proceedings to be taken by the Trustee under the Indenture, including, without limitation, the appointment of counsel to represent the interests of the Bondholders and the Trustee in the event of the occurrence of an Event of Default, provided that such direction shall not be otherwise than in accordance with law and the provisions of the Indenture, and that the Trustee shall have the right to decline to follow any such direction which in the opinion of the Trustee would be unjustly prejudicial to Holders of the Bonds not parties to such direction.

Restrictions upon Action by Individual Holders

No holder of any Bonds shall have any right to institute any suit, action or proceeding in equity or at law on any Bonds for the execution of any trust under the Indenture or for any other remedy under the Indenture unless (i) such holder previously shall have given to the Trustee written notice of the Event of Default on account of which such suit, action or proceeding is to be instituted, and (ii) not less than a majority of Bondholders shall have made written request to the Trustee after the right to exercise such powers or right of action, as the case may be, shall have accrued, and shall have afforded the Trustee a reasonable opportunity either to proceed to exercise the powers granted by the Indenture or to institute such action, suit or proceeding in its or their name, (iii) there shall have been offered to the Trustee security and indemnity satisfactory to it against the costs, expenses and liabilities to be incurred therein or thereby and (iv) the Trustee shall have refused or neglected to comply with such request within a reasonable time. Such notification, request and offer of indemnity shall be, at the option of the Trustee, conditions precedent to the execution of the powers and trusts of the Indenture or to any other remedy under the Indenture; provided, however, that without complying with the requirements above, not less than a majority of Bondholders of the Bonds may institute any such suit, action or proceeding in their own names for the benefit of all Holders of outstanding Bonds.

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Except as otherwise provided above, no one or more Holders of Bonds shall have any right in any manner whatever by his or their action to affect, disturb or prejudice the security of the Indenture or to enforce any right except in the manner provided in the Indenture. All proceedings at law or in equity shall be instituted, had and maintained in the manner provided in the Indenture and for the benefit of all Holders of Bonds and any individual right of action or other right given by law to one or more of such Holders is restricted by the Indenture to the rights and remedies therein provided.

Right to Enter and Occupy Property for Specified Purposes

At such time and as long as an Event of Default has occurred and is continuing, the Trustee shall have the right to enter upon and occupy the Property for the purpose of constructing, equipping and operating the Property, or any part thereof.

No Delay or Omission Construed as a Waiver, Waiver of Default

No delay or omission of the Trustee or of any holder of Bonds to exercise any right or power accruing upon any default shall impair any such right or power, nor shall any such delay or omission be construed to be a waiver of any such default or an acquiescence therein. Every power and remedy given to the Trustee and the Holders of Bonds, respectively, may be exercised from time to time and as often as may be deemed expedient.

The Trustee may, and upon written request of not less than a majority of the Bondholders shall, waive any default with respect to the Bonds which in its opinion shall have been remedied before the entry of final judgment or decree in any suit, action or proceeding instituted by it under the provisions of the Indenture or before the completion of the enforcement of any other remedy under the Indenture; but no such waiver shall extend to or affect any other existing or any subsequent default or impair any rights or remedies consequent thereon.

Notice of Default

The Trustee shall mail by first-class mail to the Issuer, the University, any Rating Agency then maintaining a rating on the Bonds, and all Holders of Bonds, written notice of the occurrence of any Event of Default of which the Trustee shall have notice as described below in “Notice of Events of Default” within 30 days of such notice. The Trustee shall not be subject to any liability to any holder of Bonds by reason of its failure to mail any required notice.

Cure Rights of University

Before the Trustee exercises any remedy under the Indenture or the Deed of Trust, the University shall have 30 days from receipt of the notice of default to cure any Event of Default described in clauses (a), (b), (d) or (e) under “Events of Default and Remedies” above.

Security Deposit Account; Operating Account and Operating Carryover Account

All Security Deposits and any investment earnings thereon held in the Security Deposit Account shall be held and applied in accordance with the agreements under which such Security Deposits were made, which agreements shall be made available to the Trustee upon its reasonable request. Upon an Event of Default, the Trustee shall notify the Manager, in writing at the address provided in the applicable Management Agreement delivered to the Trustee pursuant to the Indenture and in such event shall instruct the Manager to promptly transfer to the Trustee any moneys held in the Operating Account and Operating Carryover Account, and any money held in the Security Deposit Account which is available to be transferred in accordance with the terms of the Management Agreement, for deposit by the Trustee to the Revenue Fund to be disbursed in accordance with the terms of the Indenture.

Assignment of Rights, Not Assignment of Duties

Anything in the Indenture to the contrary notwithstanding, (a) the Issuer shall remain liable under each of the Issuer’s Documents to the extent set forth therein to perform all of its duties and obligations thereunder to the same extent as if the Indenture had not been executed, (b) the exercise by the Trustee or the Bondholders of any of their rights, remedies or powers under the Indenture shall not release the Issuer from any of its duties or obligations under each of the Issuer’s Documents, and (c) neither the Bondholders nor the Trustee shall have any obligation or liability under any of the Issuer’s Documents by reason of or arising out of the Indenture, nor shall the Bondholders

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or the Trustee be obligated to perform any of the obligations or duties of the Issuer thereunder or, except as expressly provided in the Indenture with respect to the Trustee, to take any action to collect or enforce any claim for payment assigned under the Indenture or otherwise.

Defeasance; Unclaimed Moneys

If the Issuer shall pay or cause to be paid the principal or Redemption Price of and interest on all Bonds at the times and in the manner stipulated therein, in the Indenture and in any Supplemental Indenture authorizing or approving the issuance of any Additional Bonds, and shall pay or cause to have paid all Administrative Expenditures, then the pledge of any Revenues and other property pledged to the Bonds under the Indenture and all other rights granted by the Indenture to the Bonds shall be discharged and satisfied. In such event, upon the request of the Issuer, the Trustee shall execute and deliver to the Issuer all such instruments as may be desirable to evidence such discharge and satisfaction, and the Trustee shall pay or deliver to the Issuer, or to such officer, board or body as may then be entitled by law to receive the same, all property held by it pursuant to the Indenture (other than any moneys and securities required for the payment or redemption of Bonds not theretofore surrendered for such payment or redemption).

A Series 2012 Bond, a Series 2013 Bonds and any other Additional Bond (except as otherwise provided in the Supplemental Indenture authorizing the issuance thereof) shall be deemed to be paid within the meaning of and for all purposes of the Indenture when (i) payment of the principal of or Redemption Price on such Bond, plus interest thereon to the due date thereof (whether such due date is by reason of maturity or upon redemption as provided in the Indenture) shall have been either (A) made or caused to be made in accordance with the terms thereof, or (B) provided for by irrevocably depositing with the Trustee (or other method satisfactory to the Trustee for the payment of the Bonds) in trust and irrevocably setting aside exclusively for such payment the following: (1) moneys sufficient, without reinvestment, to make such payment, and/or (2) Government Obligations, not subject to prepayment or call, maturing as to principal and interest in such amounts and at such times as will insure the availability of sufficient moneys to make such payment; and (ii) all necessary and proper fees, compensation and expenses of the Issuer and all Administrative Expenditures with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of the Trustee in case of payments due the Trustee and in all other cases as evidenced by a certificate from the person to whom payment is due. At such times as a Bond shall be deemed to be paid under the Indenture, as aforesaid, such Bond shall no longer be secured by or entitled to the benefits of the Indenture, except for the purposes of any such payment from such moneys or Government Obligations, as the case may be.

No deposit described above shall be deemed a payment of such Bond as aforesaid until: (x)(1) if such Bond is to be redeemed, proper notice of redemption of such Bond shall have been previously given in accordance with the Indenture or provision satisfactory to the Trustee shall have been made for the giving of such notice, (2) there shall have been delivered to the Trustee a report of an Independent Public Accountant (or other Independent Person with a favorable reputation in the field of verifying defeasance escrows) verifying that the money and the principal of, and interest on, the Government Obligations so deposited are sufficient to pay the principal and Redemption Price of such Bond on the applicable redemption date(s) or maturity date(s), as the case may be, and the interest accrued thereon to such date(s) and (3) in the event such Bond is not to be paid or redeemed within the next succeeding 60 days, until the Issuer shall have given the Trustee, on behalf of the Issuer, in form satisfactory to the Trustee, irrevocable instructions to notify (which notification may be made by publication), as soon as practicable, the Holder of such Bond in accordance with the Indenture, that the required deposit has been made with the Trustee and that such Bond is deemed to have been paid in accordance with the Indenture and stating the maturity or redemption date upon which moneys are to be available for the payment of the principal of and the applicable redemption premium (if any) on such Bond, plus interest thereon to the redemption date thereof; or (y) the maturity of such Bond.

So long as no Event of Default has occurred and is continuing, at the written request of the Issuer, any moneys held by the Trustee in trust for the payment of any of the Bonds which remain unclaimed for two years after the later of the date at which such Bonds became due and payable and the date of deposit of such moneys shall be repaid by the Trustee to the Issuer, or to such officer, board or body as may then be entitled by law to receive such moneys, as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto; provided, however, that before being required to make any such payment to the Issuer, the Trustee may, at the expense of the Issuer, cause to be published in an Authorized Baltimore Newspaper and an Authorized

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New York Newspaper a notice that such moneys remain unclaimed and that, after a date named in such notice, which date shall be not fewer than 40 nor more than 90 days after the date of publication of such notice, the balance of such moneys shall be returned to the Issuer.

No Recourse on Bonds

No recourse shall be had for the payment of the principal or Redemption Price of and interest on the Bonds or for any claims based thereon or on the Indenture against any elected or appointed official or director, officer or employee of the Issuer, all such liability, if any, being expressly waived and released by every Holder of Bonds by the acceptance of such Bonds.

Responsibilities of Trustee; Trustee Entitled to Indemnity

The duties and obligations of the Trustee shall be determined by the express provisions of the Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in the Indenture and no implied covenants shall be read into the Indenture against the Trustee. The Trustee shall not be liable for any action taken or omitted by it in the performance of its duties under the Indenture except for its own negligence or willful misconduct or if the Trustee is otherwise protected with respect to such act or omission under the provisions of the Indenture.

The Trustee may employ or retain such counsel, accountants, appraisers, agents, custodians or other experts or advisers as it may reasonably require for the purpose of determining and discharging its rights and duties under the Indenture and shall not be responsible for any misconduct on the part of any of them if employed or retained with reasonable care. The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities under the Indenture, and to each agent, custodian and other Person employed to act under the Indenture.

The Trustee may request that the Issuer deliver a certificate signed by an Authorized Officer of the Issuer setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to the Indenture, which certificate may be signed by any person authorized to sign such certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.

The Trustee shall not be responsible for any determination or calculation concerning arbitrage rebate with respect to the Bonds, for making any determination with respect to any insurance or insurance companies, for collecting any insurance monies or for determining whether the yield on any investments made under the Indenture would cause, or whether any other facts exist which would cause, the Tax-Exempt Bonds to become arbitrage bonds under Section 148 of the Code.

The Trustee shall be under no obligation to institute any suit, or to undertake any proceeding under the Indenture, or to enter any appearance or in any way defend in any suit in which it may be made defendant, or to take any steps in the execution of the trusts created by the Indenture or in the enforcement of any rights and powers under the Indenture, until it shall be indemnified to its satisfaction against any and all costs and expenses, outlays and counsel fees and other reasonable disbursements, and against all liability except as a consequence of its own negligence or willful misconduct. Nevertheless, the Trustee may begin suit, or appear in and defend suit, or do anything else in its judgment proper to be done by it as the Trustee, without indemnity, and in such case the Trustee shall, to the extent not reimbursed by the Issuer, reimburse itself from the Revenues for all costs and expenses, outlays and counsel fees and expenses and other reasonable disbursements properly incurred in connection therewith and the Trustee shall be entitled to a preference therefor over any Bond Outstanding.

Trustee Protected in Relying on Certain Documents

The Trustee may conclusively rely upon any resolution, order, notice, request, consent, waiver, certificate, statement, affidavit, requisition, bond, instrument or other document provided to the Trustee in accordance with the terms of the Indenture that it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper board or person or to have been prepared and furnished pursuant to any of the provisions of the Indenture, or upon the written opinion of any counsel, architect, engineer, insurance consultant, management consultant or accountant believed by the Trustee to be qualified in relation to the subject matter, and the Trustee shall be under no duty to make any investigation or inquiry into any statements contained or matters referred to in any such instrument. The Trustee may consult with counsel of its own selection, who may or may not be Bond

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Counsel or counsel to the Issuer, and the advice or opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it in good faith and in reliance thereon.

Whenever the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action under the Indenture, such matter may be deemed to be conclusively proved and established by a certificate signed by an Authorized Officer of the Issuer, unless other evidence in respect thereof be specifically prescribed by the Indenture. Such certificate shall be full warrant for any action taken or suffered in good faith under the provisions of the Indenture, but in its discretion the Trustee may in lieu thereof accept other evidence of such fact or matter or may require such further or additional evidence as it may deem reasonable. Any request, order, notice or other direction required or permitted to be furnished pursuant to any provision of the Indenture by the Issuer to the Trustee shall be sufficiently executed if executed in the name of the Issuer by an Authorized Officer.

Action by Trustee

The Trustee shall be under no obligation to take any action in respect of any default or Event of Default or toward the execution or enforcement of any of the trusts created by the Indenture, or to institute, appear in or defend any suit or other proceeding in connection with the Indenture, unless requested so to do in writing by a majority of Bondholders and, if in its opinion such action may tend to involve it in expense or liability, unless furnished, from time to time as often as it may require, with security and indemnity satisfactory to it; provided, however, that the foregoing provisions are intended only for the protection of the Trustee, and shall not affect any discretion or power given by any provisions of the Indenture to the Trustee to take action in respect of any default or Event of Default without such notice or request from the Holders, or without such security or indemnity.

Standard of Care

The Trustee shall have no obligation, but may require of the Issuer full information and advice as to performance of the covenants, conditions and agreements contained in the Indenture. The permissive right of the Trustee to do things enumerated in the Indenture shall not be construed as a duty. In case an Event of Default has occurred (which has not been cured or waived), the Trustee shall exercise such of the rights and powers vested in it by the Indenture, and use the same degree of care and skill in their exercise as a prudent man would exercise under the circumstances in the conduct of his own affairs.

Permitted Acts

The Trustee and its directors, officers, employees or agents may become the owner of or may in good faith buy, sell, own, hold and deal in Bonds and may join in any action that any holder of the Bonds may be entitled to take as fully and with the same rights as if it were not the Trustee. The Trustee may act as depository, and permit any of its officers or directors to act as an official of, or in any other capacity with respect to, the Issuer or any committee formed to protect the rights of the Holders of Bonds or to effect or aid in any reorganization growing out of the enforcement of the Bonds or the Indenture, whether or not such committee shall represent the holders of a majority of Bondholders.

Resignation of the Trustee

The Trustee may at any time resign and be discharged of its duties and obligations under the Indenture by giving not fewer than 45 days’ written notice, specifying the date when such resignation shall take effect, to the Issuer and each Holder of Bonds. Such resignation shall take effect upon the appointment of a successor by the Issuer or the Holders of Outstanding Bonds, as described below under “Successor Trustee” and the acceptance of such appointment by such successor. At any time the Trustee resigns and no appointment of a successor Trustee is made prior to the date specified in the notice of resignation as of the date when such resignation is to take effect, the resigning Trustee may apply to a court of competent jurisdiction for the appointment of a successor Trustee.

Removal of Trustee

The Trustee may be removed at any time by (i) a majority of Bondholders by an instrument or concurrent instruments in writing signed and acknowledged by such Holders or by their attorneys-in-fact duly authorized and delivered to the Issuer and the Trustee as provided in the Indenture, or (ii) the Issuer so long as no Event of Default shall have occurred and be continuing, by an instrument in writing signed by the Authorized Officer of the Issuer,

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and delivered to the Trustee. The Trustee may also be removed at any time for any breach of trust or for acting or proceeding in violation of, or for failing to act or proceed in accordance with, any provision of the Indenture with respect to the duties and obligations of the Trustee by any court of competent jurisdiction upon the application of the Issuer or of the Holders of not less than ten percent (10%) of the Outstanding Bonds.

Successor Trustee

If the Trustee shall resign, be removed, be dissolved or become incapable of acting, or shall be adjudged a bankrupt or insolvent, or if a receiver, liquidator or conservator of the Trustee or of its property shall be appointed, or if any public officer shall take charge or control of the Trustee or of its property or affairs, the position of the Trustee shall become vacant. If the position of Trustee shall become vacant for any of the foregoing reasons or for any other reason, a successor Trustee may be appointed within one year after any such vacancy shall have occurred by a majority of the Bondholders by an instrument or concurrent instruments in writing signed and acknowledged by such Holders or their attorneys-in-fact, duly authorized and delivered to such successor Trustee, with notification thereof being given to the predecessor Trustee and the Issuer.

Until such successor Trustee shall have been appointed by a majority of Bondholders, the Issuer shall forthwith appoint a Trustee. Copies of any instrument of the Issuer providing for any such appointment shall be delivered by the Issuer to the Trustee so appointed and the predecessor Trustee. The successor Trustee shall mail notice of any such appointment to each Holder of any outstanding Bond within 30 days after such appointment. Any appointment of a successor Trustee made by the Issuer immediately and without further act shall be superseded and revoked by an appointment subsequently made by a majority of Bondholders.

If in a proper case no appointment of a successor Trustee shall be made within 45 days after the giving by any Trustee of any written notice of resignation, after delivery to the Trustee of notice of removal or after the occurrence of any other event requiring or authorizing such appointment, the Trustee or any holder of Outstanding Bonds may apply to any court of competent jurisdiction for the appointment of such a successor, and the court may thereupon, after such notice, if any, as the court may deem proper, appoint such successor.

Any successor Trustee shall be a commercial bank or trust company or national banking association or similar entity having corporate trust powers (i) having a capital and surplus aggregating at least $75,000,000, or a subsidiary bank, trust company or national banking association whose capital and surplus, together with its parent bank, trust company or bank holding company, as the case may be, is at least $75,000,000, if there be such a commercial bank or trust company or national banking association or similar entity having corporate trust powers willing and able to accept the appointment on reasonable and customary terms and (ii) authorized by law to perform all the duties of the Trustee required by the Indenture.

Merger, Conversion or Consolidation of Trustee

Any company into which the Trustee may be merged or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business shall be the successor to such Trustee under the Indenture, without any further act, deed or conveyance, provided that such company shall be a commercial bank or trust company or national banking association or similar entity having corporate trust powers qualified to be a successor to such Trustee under the provisions of the Indenture.

Notice of Events of Default

The Trustee shall not be required to take notice or be deemed to have notice of any default or Event of Default under the Indenture or the Deed of Trust other than the failure to pay the principal of, interest on or the purchase price of, any Bond, unless a Responsible Officer shall have actual knowledge of such default or Event of Default, or the Trustee shall have been given specific written notice at its Corporate Trust Office of such default or Event of Default by the Holders of at least 25% in aggregate principal amount of the Bonds then Outstanding or by the Issuer, which notice references the Bonds and the Indenture.

Exercise of Issuer’s Rights

The Trustee, as the assignee of the Issuer, in its sole discretion, shall be entitled to seek the direction of a majority of Bondholders prior to exercising any right, duty, obligation or power imposed upon or granted to the

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Issuer pursuant to the Indenture, the Deed of Trust or any other document executed and delivered in connection with the Bonds and assigned to the Trustee. The provisions of the Indenture concerning the Trustee shall apply to the exercise by the Trustee, as the assignee of the Issuer, of the rights, duties, obligations and powers of the Issuer under the Indenture, the Deed of Trust and any other document executed and delivered in connection with the Bonds and assigned to the Trustee.

No Liability for Clean-up of Hazardous Materials

In the event that the Trustee is required to acquire title to an asset for any reason, or take any managerial action of any kind in regard thereto, in order to carry out any fiduciary or trust obligation for the benefit of another, which in the Trustee’s sole discretion may cause the Trustee to be considered an “owner or operator” under the provisions of the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. §9601 et seq., or otherwise cause the Trustee to incur liability under CERCLA or any other federal, state or local law, the Trustee reserves the right to, instead of taking such action, either resign as Trustee or arrange for the transfer of the title or control of the asset to a court appointed receiver. The Trustee shall not be liable to the Issuer or Bondholders or any other person for any environmental claims or contribution action under any federal, state or local law, rule or regulation by reason of the Trustee’s actions and conduct as authorized, empowered and directed hereunder or relating to the discharge, release or threatened release of hazardous materials into the environment, unless caused by the negligence or willful misconduct of the Trustee.

Issuer Protected in Acting in Good Faith

In the exercise of the powers of the Issuer and its directors, officials, officers, employees and agents under the Indenture or the Deed of Trust, the Issuer and its directors, officials, officers, employees and agents shall not be accountable to the Trustee or any holder of any Bonds for any action taken or omitted by it or its directors, officials, officers, employees and agents in good faith and believed in good faith by it or them to be authorized or within the discretion or rights or powers conferred by the Indenture or by Deed of Trust.

No recourse shall be had by the Trustee or any holder of any Bonds for any claims based on the Indenture or the Deed of Trust or on any Bond, Credit Facility or Credit Facility Agreement against any director, official, officer, employee or agent of the Issuer alleging personal liability on the part of such person unless such claims are based upon the bad faith, fraud or deceit of such person.

The Issuer and its directors, officials, officers, employees and agents shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding, in good faith, reasonably and in accordance with the terms of the Indenture or the Deed of Trust upon any resolution, order, notice, request, consent, waiver, certificate, statement, affidavit, requisition, bond or other document that it or they shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper board or person or to have been prepared and furnished pursuant to any of the provisions of the Indenture or the Deed of Trust, or upon the written opinion of any counsel, architect, engineer, insurance consultant, management consultant or accountant believed by it or them to be qualified in relation to the subject matter, and it and they shall be under no duty to make any investigation or inquiry into any statements contained or matters referred to in any such instrument. The Issuer and its directors, officials, officers, employees and agents may consult with counsel, who may or may not be Bond Counsel, or counsel to the Issuer, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken in accordance therewith.

Whenever the Issuer or its directors, officials, officers, employees or agents shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action under the Indenture or the Deed of Trust, such matter may be deemed to be conclusively proved and established by a certificate signed by an Authorized Officer of the Issuer, unless other evidence with respect thereto is specifically required under the Indenture or the Deed of Trust. Such certificate shall be full warrant for any action taken or suffered in good faith under the provisions of the Indenture, but in its discretion the Issuer or its directors, officials, officers, employees or agents may in lieu thereof accept other evidence of such fact or matter or may require such further or additional evidence as it or they may deem reasonable. Any request, order, notice or other direction required or permitted to be furnished pursuant to any provision of the Indenture by the Issuer shall be sufficiently executed if executed in the name of such person by an Authorized Officer thereof.

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Moneys and Funds Held for Particular Bonds

Amounts held by the Trustee for the payment of the principal or Redemption Price of and interest on any Bonds due on any date shall, pending such payment, be set aside and held in trust by it (without liability for interest thereon) for the Holders of such Bonds and, for the purposes of the Indenture, such principal or Redemption Price of and interest on such Bonds, due after such date, shall no longer be considered to be unpaid.

All Obligations of Issuer Limited; Non-Recourse

The Bonds, together with premium (if any) and interest thereon, and the purchase price thereof, do not constitute an indebtedness to which the faith and credit of the Issuer are pledged but are limited obligations of the Issuer payable solely from the Trust Estate. The Bonds shall be a valid claim of the respective Owners thereof only against the Trust Estate.

THE BONDS AND INTEREST THEREON AND THE REDEMPTION PRICE THEREOF ARE LIMITED OBLIGATIONS OF THE ISSUER, THE PRINCIPAL AND REDEMPTION PRICE OF AND INTEREST ON WHICH ARE PAYABLE SOLELY FROM THE TRUST ESTATE. NEITHER THE BONDS NOR THE INTEREST THEREON NOR THE REDEMPTION PRICE THEREOF IS A DEBT, LIABILITY OR A PLEDGE OF THE FULL FAITH AND CREDIT OF THE STATE, ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER. ISSUANCE OF THE BONDS IS NOT DIRECTLY, INDIRECTLY OR CONTINGENTLY A MORAL OR OTHER OBLIGATION OF THE STATE, ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER TO LEVY OR PLEDGE ANY TAX OR TO MAKE ANY APPROPRIATION TO PAY THE BONDS. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE, ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, INTEREST ON OR THE REDEMPTION PRICE OF THE BONDS. THE ISSUER HAS NO TAXING POWER.

NOTWITHSTANDING ANYTHING IN THE INDENTURE CONTAINED TO THE CONTRARY, THE ISSUER SHALL IN NO WAY BE LIABLE FOR ANY PAYMENT REQUIRED TO BE MADE HEREUNDER EXCEPT FROM REVENUES OF THE PROPERTY, IF ANY, MADE AVAILABLE THEREFOR PURSUANT TO THE TERMS OF THE INDENTURE AND ANY CLAIM BASED ON OR IN RESPECT OF ANY LIABILITY OF THE ISSUER FOR (I) THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON, OR THE REDEMPTION PRICE OF, THE BONDS, OR (II) THE PERFORMANCE OR PAYMENT OF ANY OTHER AMOUNT, COVENANT, AGREEMENT, TERM OR CONDITION CONTAINED IN THE INDENTURE, THE DEED OF TRUST OR ANY OTHER DOCUMENT EXECUTED AND DELIVERED IN CONNECTION WITH THE BONDS SHALL BE PAID SOLELY OUT OF, AND ENFORCED SOLELY AGAINST, SUCH REVENUES TO THE EXTENT AVAILABLE UNDER THE INDENTURE AND, IN EITHER CASE, NOT AGAINST ANY OTHER ASSETS, PROPERTIES OR FUNDS OF THE ISSUER OR AGAINST ANY ASSETS, PROPERTIES OR FUNDS OF (a) ANY DIRECTOR, OFFICER, EMPLOYEE, SUCCESSOR, ASSIGN OR AGENT OF THE ISSUER, OR (B) ANY OTHER PERSON, CORPORATION OR OTHER ENTITY AFFILIATED WITH ANY OF THE FOREGOING, INCLUDING, WITHOUT LIMITATION, THE STATE AND OTHER GOVERNMENTAL UNIT OR ANY AGENCY, PUBLIC BODY OR INSTRUMENTALITY THEREOF. THE PROVISIONS SUMMARIZED IN THIS SECTION SHALL BE A LIMITATION ON ALL OF THE ISSUER’S PAYMENT AND PERFORMANCE OBLIGATIONS SET FORTH IN THE INDENTURE AND THE DEED OF TRUST AND SHALL BE DEEMED INCORPORATED INTO EACH SECTION OF THE TRUST INDENTURE AND THE DEED OF TRUST THAT PROVIDES FOR THE ISSUER TO MAKE A PAYMENT OF ANY TYPE WHATSOEVER OR CARRY OUT OR PERFORM ANY OBLIGATIONS OR TO CAUSE ANY THIRD PARTY TO CARRY OUT OR PERFORM ANY OBLIGATIONS AND SHALL SUPERSEDE ANY PROVISIONS TO THE CONTRARY SET FORTH IN THE INDENTURE OR IN THE DEED OF TRUST.

Each and every covenant made herein by the Issuer is predicated upon the condition that neither the Issuer nor the State nor any other governmental unit shall in any event be liable for the payment of the principal or Redemption Price of or interest on the Bonds, or the performance of any pledge, mortgage, obligation or agreement created by or arising under the Indenture or the bonds from any source other than the Trust Estate; and, further, that neither the bonds nor any such obligation or agreement of the Issuer shall be construed to constitute a debt of the State or any other governmental unit within the meaning of any constitutional or statutory provision whatsoever, or as a pledge of the general credit, full faith or taxing power of the Issuer, the State or any other governmental unit. The Issuer has no taxing power.

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SUMMARY OF CERTAIN PROVISIONS OF THE DEED OF TRUST

The following is a summary of certain provisions of the Deed of Trust. It is not a complete recital of the terms of the Deed of Trust and reference should be made to it for its complete terms. Words and terms used in this summary shall have the same meaning as in the Deed of Trust.

Property Subject to the Deed of Trust

The following property is conveyed to the Individual Trustees for the benefit of the Trustee (the “Beneficiary”) as security for the payment of the amounts payable under the Indenture and all other amounts secured or to be secured by the Deed of Trust:

(a) the Issuer’s entire leasehold interest under the Ground Lease including any option to renew the Ground Lease and any acquisition of the fee simple estate in the Land;

(b) all credit deposits, options, privileges and rights of the Issuer under the Ground Lease;

(c) all buildings, structures and improvements of every kind and description erected and placed on the Land, including (without limitation) the Phase I Project and the Phase II Project (collectively, the “Improvements”);

(d) all right, title and interest of the Issuer, including any after-acquired right, title or reversion, in and to the beds of the ways, streets, avenues and alleys adjoining the Land;

(e) all and singular the rights, alleys, ways, tenements, hereditaments, easements, appurtenances, passages, waters, water rights, water courses, riparian rights, liberties, advantages, accessions and privileges now or hereafter appertaining to the Property or any part thereof, including, but not limited to, any homestead or other claim at law or in equity, the reversion or reversions, remainder or remainders thereof, and also all the estate, property, claim, right, title or interest now owned or hereafter acquired by the Issuer in or to the Property or any part thereof;

(f) all building materials, fixtures, machinery, equipment and tangible personal property of every kind and nature whatsoever, now or hereafter located or contained in or upon or attached to the Land or the Improvements or any part thereof, and used or usable in connection with any present or future use or operations of the Land or the Improvements or any part thereof, whether now owned or hereafter acquired by the Issuer or others, together with all Additions thereto;

(g) all of the rents, royalties, issues, profits, revenues, income accounts, accounts receivable, contract rights, general intangibles, and other benefits of the Property, or arising from the use or enjoyment of all or any portion thereof, or from any lease or agreement pertaining thereto and all right, title and interest of the Issuer in and to, and remedies under (but not the Issuer’s burdens and obligations under), any and all leases and subleases of the Property (including any security deposits but only to the extent permitted by such lease or sublease and applicable law), or any part thereof, and all accounts, accounts receivable, contract rights, general intangibles and other rights growing out of or in connection with such leases and subleases, together with all proceeds thereof; and including, without limitation, all cash or securities deposited thereunder to secure performance by lessees or sublessees of their obligations thereunder whether such cash or securities are to be held until the expiration of the terms of such leases and subleases or are to be applied to one or more of the installments of rent coming due immediately pursuant to such leases or subleases prior to the expiration of such terms; and reserving in the Issuer a license terminable upon the occurrence of an Event of Default (defined under the Deed of Trust) to collect and receive the same;

(h) any and all judgments, awards of damages (including but not limited to severance and consequential damages), payments, proceeds, settlements or other compensation, including interest thereon, and the right to receive the same, as a result of, in connection with, or in lieu of (a) any taking of the Property or any part thereof under the power of eminent domain, either temporarily or permanently, (b) any change or alteration of the grade of any street, and (c) any other injury or damage to, or decrease in value of, the Property or any part thereof (all of the foregoing being sometimes referred to, collectively, as the “Condemnation Awards,” or singularly a “Condemnation Award”), to the extent of all indebtedness secured by the Deed of Trust (the “Deed of Trust Indebtedness”) at the date of receipt of any such Condemnation Award by the Beneficiary, and of the reasonable counsel fees, costs and disbursements, if any, incurred by the Beneficiary in connection with the collection of such Condemnation Award;

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(i) any and all payments, proceeds, settlements or other compensation, including any interest thereon, and the right to receive the same, from any and all insurance policies covering the Property or any portion thereof;

(j) all of the interest, rights, options, powers and privileges of the Issuer whether as a party thereto, an assignee or third party beneficiary thereof or otherwise, in and to (but not the Issuer’s obligations and burdens under) all architectural, engineering and similar plans, specifications, drawings, reports, surveys, plats, permits and the like, contracts for construction, operation and maintenance of, or provision of services to, the Property.

Transfer of Property

Except (i) for Permitted Encumbrances and (ii) as described above under “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Limitations on Alteration of the Property; Disposition of Equipment Collateral” and Release of Phase I Project; Release of Phase II Project,” the Issuer will not encumber, transfer, sell, assign, lease, dispose of, or contract to transfer all or any part of the Property, unless (a) the Ground Lessor is the lessor under the Ground Lease, (b) the Issuer provides to the Trustee documentation relating to such encumbrance, transfer, sale, assignment, lease, disposition of or contract relating to a transfer of the Property that has been approved by the State of Maryland Board of Public Works (the “BPW”) and such documentation or other written approval of the BPW includes the determination of the BPW to the effect that such encumbrance, transfer, sale, assignment, lease, disposition of or contract relating to the transfer of the Property shall not (i) adversely affect compliance by the Issuer with the Revenue Covenant (as defined in the Indenture) or (ii) deprive the Property of any real or personal property needed for the operation of the Property, and (iii) the Issuer provides to the Trustee a certificate dated within 30 days preceding the date of such transfer of an Independent Architect or Independent Engineer to the effect that any such transfer will not destroy or materially impair the means of ingress to or egress from the Property.

Easements, Restrictive Covenants, Zoning; Release of Liens

Except for Permitted Encumbrances that are otherwise provided for in accordance with the definition thereof or the provisions of the Ground Lease or the Indenture, the Issuer shall not initiate, grant, join in, release or consent to any change in any restrictive covenant, easement, license, right-of-way (including the dedication of public highways) or any other public or private restriction limiting or defining the uses which may be made of the Property or any part thereof unless the Issuer shall furnish to the Trustee:

(a) (i) a certificate executed by the Authorized Officer of the Issuer, stating that (A) any such grant, consent, release or change will not cause or result in an Event of Default under the Indenture or the Deed of Trust, (B) as of the date of such request, no Event of Default under the Indenture or the Deed of Trust or any event which, with the lapse of time or the giving of notice, or both, would constitute an Event of Default under the Indenture or the Deed of Trust, has occurred and is continuing, and (C) such grant, release, consent or change will not adversely affect the revenue producing capability of the Property or deprive the Property of any real or personal property needed for the operation thereof; and

(ii) a certificate dated within 30 days preceding the date of such request of an Independent Architect or Independent Engineer to the effect that any such grant, consent, release, or change (A) will not destroy or materially impair the means of ingress to or egress from the Property, and (B) will not materially interfere with or impair the efficiency of operations then being conducted on the Property by the Issuer or any occupant of the Property; or

(b) (i) evidence that the Ground Lessor is the lessor under the Ground Lease, (ii) documentation relating to such restrictive covenant, easement, license, right-of-way (including the dedication of public highways) or any other public or private restriction limiting or defining the uses which may be made of the Property or any part thereof which has been approved by the BPW and such documentation or other written approval of the BPW includes the determination of the BPW to the effect that such restrictive covenant, easement, license, right-of-way, (including the dedication of public highways) or any other public or private restriction limiting or defining the uses which may be made of the Property shall not (i) adversely affect compliance by the Issuer with the Revenue Covenant, or (ii) deprive the Property of any real or personal property needed for the operation of the Property, and (iii) a certificate dated within 30 days preceding the date of such request of an Independent Architect or Independent Engineer to the effect that

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any such grant, consent, release, or change will not destroy or materially impair the means of ingress to or egress from the Property; and

(ii) a certificate executed by the Authorized Officer of the Issuer, stating that (A) any such grant, consent, release or change will not cause or result in an Event of Default under the Indenture or the Deed of Trust, and (B) as of the date of such request, no Event of Default under the Indenture or the Deed of Trust or any event which, with the lapse of time or the giving of notice, or both, would constitute an Event of Default under the Indenture or the Deed of Trust, has occurred and is continuing.


The following are “Events of Default” under the Deed of Trust: an event that constitutes an Event of Default under the Indenture and failure of the Issuer to fully and promptly perform, comply with or observe any other term, covenant or agreement contained in the Deed of Trust which failure shall continue for a period of 30 days after written notice or for such longer period to cure such failure; provided, however, that if such failure is such that it cannot be corrected within 30 days, it shall not be an event of default under the Deed of Trust if the Issuer is taking appropriate corrective action to cure such failure and if such failure will not impair the security for the Issuer’s obligations under the Indenture and the Deed of Trust.

If an Event of Default shall occur, the Beneficiary or the Individual Trustees at the direction of the Beneficiary may take possession of and sell the Property or any part thereof requested by the Beneficiary to be sold in accordance with the law of the State, subject to the Ground Lease. Proceeds from the sale of the Property after payment of unpaid Administrative Expenditures and costs and expenses incurred in the possession and sale of the Property including, without limitation, attorneys’ fees and trustee’s commissions, shall be applied as described above under “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Events of Default and Remedies – Enforcement and Priority of Payments Following Default.” The Beneficiary shall provide the Ground Lessor with at least 30 days’ prior written notice of its initiation of foreclosure proceedings under the Deed of Trust.

In addition, to the extent permitted by law, and with or without the appointment of a receiver, or application therefor, the Beneficiary or the Individual Trustees, on behalf of the Beneficiary, may enter and take possession of the Property, and may use, operate, manage and control the Property. Upon taking possession, the Beneficiary or the Individual Trustees, as the case may be, shall have the right to manage, and to receive all earnings, income, rents and proceeds from the Property, and to carry on the business and exercise all rights and powers of the Issuer with respect to the Property. Any amounts so received by the Beneficiary or the Individual Trustees shall be applied (i) first, to pay to pay any unpaid Administrative Expenditures, (ii) second, to pay all costs and expenses of so entering upon, taking possession of, holding, operating, maintaining, preserving and managing the Property or any part thereof including, but not in limitation of the foregoing, compensation to the attorneys, employees or agents of the receiver engaged or employed with regard thereto, (iii) third, to pay the cost and expense of all repairs, renewals, replacements, alterations, additions, betterments and improvements to or upon the Property or any part thereof, (iv) fourth, to pay all of the other Deed of Trust Indebtedness and the Issuer’s obligations under the Indenture and the Deed of Trust in such order and manner as set forth in the Indenture, and (v) lastly, to pay the surplus, if any, to the Issuer or any person entitled thereto upon surrender and delivery to the purchaser or purchasers of the Property, and less the costs, if any, of obtaining possession.

If an Event of Default occurs, the Beneficiary shall be entitled as a matter of right, without regard to the adequacy of the security, to the immediate appointment of a receiver of the Property and of the revenues and profits thereof.

Notwithstanding anything to the contrary contained in the Deed of Trust, the Beneficiary or the Individual Trustees shall not be entitled to exercise any remedies upon an Event of Default until the University has been afforded the opportunity to cure such Event of Default within 30 days from the receipt of notice of such Event of Default, which notice shall be given by the Trustee in accordance with the Indenture.

Security Agreement

The Deed of Trust constitutes a security agreement under the Maryland Uniform Commercial Code. The Beneficiary may proceed under the remedies provided by the Maryland Uniform Commercial Code following an Event of Default.

Appendix C

PROPOSED FORM OF BOND COUNSEL OPINION

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PROPOSED FORM OF BOND COUNSEL OPINION

(Closing Date)

Maryland Economic Development Corporation Baltimore, Maryland

$12,705,000 Maryland Economic Development Corporation

Student Housing Refunding Revenue Bonds (Salisbury University Project)

Series 2013

We have acted as bond counsel to Maryland Economic Development Corporation, a body politic and corporate and an instrumentality of the State of Maryland (the “Issuer”), in connection with the issuance by the Issuer of its $12,705,000 Maryland Economic Development Corporation Student Housing Refunding Revenue Bonds (Salisbury University Project) Series 2013 (the “Bonds”).

We have examined the law and such certified proceedings and other papers as we have deemed necessary to render this opinion. The scope of our engagement as bond counsel extends solely to an examination of the facts and law incident to rendering the opinions specifically expressed herein. This opinion is dated as of the date of issuance and delivery of the Bonds.

Unless the context clearly indicates otherwise, each capitalized term used in this opinion shall have the same meaning as set forth in the Trust Indenture dated as of June 1, 2003 (the “Original Indenture”), between the Issuer and Manufacturers and Traders Trust Company, as Trustee (the “Trustee”), as supplemented and amended by the First Supplemental Indenture dated as of July 1, 2012 (the “First Supplemental Indenture”) and the Second Supplemental Indenture dated as of June 1, 2013 (the “Second Supplemental Indenture”). The Original Indenture, as supplemented and amended by the First Supplemental Indenture and the Second Supplemental Indenture, is hereinafter referred to as the “Indenture.”

We refer you to the Bonds and to the Indenture for a description of the purposes for which the Bonds are issued, the security for the Bonds, the manner in which and times at which the principal of and interest on the Bonds are payable, the interest rates payable on the Bonds, and all other details of the Bonds.

As to questions of fact material to our opinion, without undertaking to verify the same by independent investigation, we have relied upon representations of the Issuer contained in the Indenture, the certified proceedings of the Issuer, certifications by public officials, and certifications by the officers, employees and representatives of the Issuer and certain other persons involved in the issuance and sale of the Bonds.

The Internal Revenue Code of 1986, as amended (the “Code”) sets forth certain other requirements which must be met subsequent to the issuance and delivery of the Bonds for interest thereon to remain excludable from the gross income of the owners of the Bonds for federal income tax purpose, including the rebate of certain arbitrage profits to the United States. The Issuer has covenanted to comply with such requirements in the Indenture and the Issuer’s Tax Certificate. Noncompliance with such requirements may cause the interest on the Bonds to be includable in the gross income of the owners of the Bonds for federal income tax purposes, retroactive to the date of issue of the Bonds or as of some later date.

We express no opinion herein concerning any law other than the law of the State of Maryland and the federal law of the United States of America.

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We express no opinion as to the existence of or title to real or personal property, and we express no opinion as to the creation, validity or priority of any lien upon, assignment of, pledge of or security interest in any real or personal property. It is the Trustee’s responsibility to continue or maintain the perfection, priority or validity of any liens, assignments, security interests or pledges created as security for the Bonds.

In connection with this opinion, we have not reviewed or examined any financial information or other information with respect to the Project or any offering material relating to the Bonds or the Project, and we express no opinion relating thereto herein.

This opinion does not constitute or imply a recommendation of the market or financial value of the Bonds or an assessment of the strength or appropriateness of the covenants of any of the parties to any of the Documents, the possibility of default, the eligibility or suitability of the Bonds as an investment, or any other legal or financial aspect of the Bonds not expressly addressed herein.

We have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents.

Based upon, and subject to, the foregoing, and on the basis of existing law, it is our opinion, as of the date hereof, that:

1. The Issuer is a validly created and existing body politic and corporate and is an instrumentality of the State of Maryland, with full power and authority under the Act to issue and sell the Bonds and to enter into and perform its obligations under the Indenture, the Deed of Trust and the Bonds.

2. The Bonds have been duly and properly authorized, executed and delivered by the Issuer, and upon authentication and delivery by the Trustee as required by the Indenture, will (a) constitute the valid and legally binding special, limited obligations of the Issuer, (b) be enforceable against the Issuer in accordance with their terms and (c) be entitled to the benefit and security of the Indenture to the extent provided therein.

3. The Indenture and the Deed of Trust have been duly and properly authorized, executed and delivered by the Issuer, and, assuming the due and proper authorization, execution and delivery of the Indenture by the Trustee, constitute the valid and legally binding obligations of the Issuer and are enforceable against the Issuer in accordance with their respective terms.

4. Pursuant to the Indenture, the Issuer has effectively pledged and assigned the Trust Estate to the Trustee for the benefit of the owners of the Bonds as security for the Bonds as provided in the Indenture. Pursuant to the Act, such pledge and assignment is valid and binding against any person having a claim against the Issuer in tort, contract or otherwise, regardless of whether the person has notice of the pledge or assignment; and such pledge and assignment has priority over the claim.

5. Interest on the Bonds is excludable from gross income for purposes of federal income tax under existing laws as enacted and construed on the date of initial delivery of the Bonds, assuming the accuracy of the certifications of the Issuer and continuing compliance by the Issuer with the requirements of the Code. Interest on the Bonds will not be an item of tax preference for purposes of either individual or corporate federal alternative minimum tax; however, interest on Bonds held by a corporation (other than an S corporation, regulated investment company or real estate investment trust) may be indirectly subject to federal alternative minimum tax because of its inclusion in the adjusted current earnings of a corporate holder.

We express no opinion regarding other federal tax consequences relating to ownership or disposition of, or the accrual or receipt of interest on, the Bonds.

Each maturity of the Bonds is offered at a premium (“original issue premium”) over its principal amount. Original issue premium on a Bond is amortizable periodically over the term of a Bond through reductions in the

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holder’s tax basis for the Bond for determining taxable gain or loss from sale or from redemption prior to maturity. Amortization of premium does not create a deductible expense or loss.

6. By the terms of the Act, the Bonds and the interest payable thereon are forever exempt from all Maryland state and local taxes, but the terms of the Act do not expressly refer to estate or inheritance taxes, or to any other taxes not levied or assessed directly on the Bonds, the interest thereon, their transfer or the income therefrom.

THE BONDS AND INTEREST THEREON AND THE REDEMPTION PRICE THEREOF ARE LIMITED OBLIGATIONS OF THE ISSUER, THE PRINCIPAL AND REDEMPTION PRICE OF AND INTEREST ON WHICH ARE PAYABLE SOLELY FROM THE TRUST ESTATE. NEITHER THE BONDS NOR THE INTEREST THEREON NOR THE REDEMPTION PRICE THEREOF IS A DEBT, LIABILITY OR A PLEDGE OF THE FULL FAITH AND CREDIT OF THE STATE OR ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER. THE ISSUANCE OF THE BONDS IS NOT DIRECTLY, INDIRECTLY OR CONTINGENTLY A MORAL OR OTHER OBLIGATION OF THE STATE OR ANY GOVERNMENTAL UNIT THEREOF OR THE ISSUER, TO LEVY OR PLEDGE ANY TAX OR TO MAKE ANY APPROPRIATION TO PAY THE BONDS. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE, ANY GOVERNMENTAL UNIT THEREOF OR OF THE ISSUER IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, INTEREST ON OR THE REDEMPTION PRICE OF THE SERIES 2013 BONDS. THE ISSUER HAS NO TAXING POWER.

THE OBLIGATIONS OF THE ISSUER UNDER THE BONDS, THE INDENTURE, THE DEED OF TRUST AND THE OTHER DOCUMENTS ARE ALSO LIMITED AS PROVIDED THEREIN.

The rights of any owner of the Bonds and the enforceability of the Bonds, the Indenture, the Deed of Trust and any other of the Bond Documents are subject to: (a) the exercise of judicial discretion in accordance with general principles of equity (whether applied by a court of law or a court of equity), including judicial limitations on rights to specific performance; (b) the valid exercise of the constitutional powers of the United States of America and of the sovereign police and taxing powers of state or other governmental units having jurisdiction; and (c) bankruptcy, insolvency, reorganization, moratorium or other similar laws heretofore or hereafter in effect affecting creditors’ rights, to the extent constitutionally applicable.

Very truly yours,

Appendix D

PROPOSED FORM OF CONTINUING DISCLOSURE AGREEMENT

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PROPOSED FORM OF CONTINUING DISCLOSURE AGREEMENT

CONTINUING DISCLOSURE AGREEMENT

This Continuing Disclosure Agreement (this “Agreement”) dated as of June 1, 2013, is executed and delivered by the MARYLAND ECONOMIC DEVELOPMENT CORPORATION (the “Issuer”), MANUFACTURERS AND

TRADERS TRUST COMPANY, as dissemination agent (the “Dissemination Agent”), and MANUFACTURERS AND

TRADERS TRUST COMPANY, as trustee (the “Bond Trustee”), in connection with the issuance by the Issuer of its $12,705,000 Student Housing Refunding Revenue Bonds (Salisbury University Project) Series 2013 (the “Bonds”). The Bonds are being issued pursuant to the Indenture described below.

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

Section 1. Purpose of the Disclosure Agreement. This Agreement is being executed and delivered by the Issuer, the Dissemination Agent, and the Bond Trustee for the benefit of the holders and Beneficial Owners (defined below) of the Bonds and in order to assist RBC Capital Markets, LLC (the “Participating Underwriter”), in complying with the Rule (defined below). The Issuer, the Dissemination Agent, and the Bond Trustee acknowledge that the Issuer has undertaken no responsibility with respect to any reports, notices, or disclosures provided or required to be provided other than under this Agreement, and has no liability to any person, including (without limitation) any holder or Beneficial Owner of the Bonds, with respect to any such reports, notices, or disclosures other than as provided in this Agreement.

Section 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Agreement unless otherwise defined herein, the following capitalized terms shall have the following meanings:

“Annual Report” shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Agreement, together with any generally accepted cover sheet or similar transmittal document.

“Beneficial Owner” shall mean any person that (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (ii) is treated as the owner of any Bonds for federal income tax purposes.

“Disclosure Representative” shall mean such person or persons as the Issuer shall designate in writing to the Dissemination Agent and the Bond Trustee from time to time.

“Dissemination Agent” shall mean the Bond Trustee, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the Issuer and that has filed with the Bond Trustee a written acceptance of such designation.

“EMMA” shall mean the continuing disclosure service established by the Municipal Securities Rulemaking Board known as the Electronic Municipal Market Access (EMMA) system as provided at http://www.emma.msrb.org, or any other similar system acceptable to or as may be specified by the Securities and Exchange Commission from time to time.

“Indenture” shall mean the Trust Indenture dated as of June 1, 2003, by and between the Issuer and the Bond Trustee, as amended and supplemented by the First Supplemental Trust Indenture dated as of July 1, 2012 and the Second Supplemental Trust Indenture dated as of June 1, 2013, each by and between the Issuer and the Bond Trustee and as further amended and supplemented from time to time.

“Listed Events” shall mean any of the events referred to or listed in Section 5(a) of this Agreement.

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“Participating Underwriter” shall mean the original Participating Underwriter of the Bonds required to comply with the Rule in connection with the offering of the Bonds.

“Rule” shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

Section 3. Provision of Annual and Other Reports. (a) The Issuer shall provide, or shall cause the Dissemination Agent to provide, not later than December 1 after the end of each of the Issuer’s fiscal years with respect to the Property (currently July 1 – June 30) (and with respect to any other fiscal year, not later than the first (1st) day of the sixth month after the end of such fiscal year) commencing with the report for the Property for the fiscal year ending June 30, 2013, to EMMA, an Annual Report that is consistent with the requirements of Section 4 of this Agreement. In each case, the Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Agreement. By way of illustration, so long as the Issuer’s fiscal year ends on June 30, the Annual Report for such fiscal year shall be provided to EMMA by December 1 of the succeeding fiscal year. If the fiscal year of the Issuer changes, the Issuer shall notify the Dissemination Agent and the Bond Trustee in writing of such change, and the Dissemination Agent shall provide such notice to EMMA.

(b) Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for providing the Annual Reports to EMMA, the Issuer shall provide the Annual Report to the Dissemination Agent. If, by such date, the Dissemination Agent has not received a copy of an Annual Report, the Dissemination Agent shall contact the Issuer to determine if the Issuer is in compliance with subsection (a) above.

(c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to EMMA by the date required in subsection (a) above, the Dissemination Agent shall send a notice to EMMA in substantially the form attached hereto as Exhibit A.

(d) The Dissemination Agent shall if and to the extent the Issuer has provided the Annual Report to the Dissemination Agent, file a report with the Issuer and (if the Dissemination Agent is not the Bond Trustee) the Bond Trustee certifying that the Annual Report has been provided to EMMA pursuant to this Agreement, stating the date it was provided.

(e) The Issuer shall provide, or cause the Dissemination Agent to provide, not later than fifteen (15) days after the receipt thereof, to EMMA, any quarterly unaudited financial statements of the Issuer for the Property for the prior fiscal quarter, including the certificate of the Authorized Officer of the Issuer submitted in connection therewith.

(f) The Issuer shall provide, or cause the Dissemination Agent to provide, contemporaneously to EMMA, any information provided to the Participating Underwriter pursuant to Section 7.04 of the Indenture.

Section 4. Content of Annual Report. The Annual Report of the Issuer shall contain or include by reference the following information:

(a) The audited financial statements of the Issuer with respect to the Property for the prior fiscal year, prepared in accordance with generally accepted accounting principles as promulgated from time to time by the Financial Accounting Standards Board. If the Issuer’s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a) hereof, the Annual Report shall contain unaudited financial statements, and the audited financial statements of the Issuer shall be filed in the same manner as the Annual Report when they become available.

(b) A cash flow statement relating to the Property prepared by the Manager for the prior fiscal year in the same format as the format for the Cash Flow Forecast set forth in the Official Statement under the heading “CASH

FLOW FORECAST,” which shall include the actual vacancies relating to the Property for such fiscal year.

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Section 5. Reporting of Significant Events. (a) Pursuant to the provisions of this Section 5, within 10 business days after the occurrence thereof, the Issuer shall give, or cause to be given, to the Dissemination Agent, notice of the occurrence of any default under the Indenture, if material, and of any of the following events with respect to the Bonds:

(i) principal and interest payment delinquencies;

(ii) non-payment related defaults, if material;

(iii) unscheduled draws on debt service reserves reflecting financial difficulties;

(iv) unscheduled draws on any credit enhancement reflecting financial difficulties;

(v) substitution of credit or liquidity providers, or their failure to perform;

(vi) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds;

(vii) modifications to rights of the holders of the Bonds, if material;

(viii) bond calls, if material, and tender offers;

(ix) defeasances;

(x) release, substitution, or sale of property securing repayment of the Bonds, if material.

(xi) rating changes;

(xii) bankruptcy, insolvency, receivership or similar event of the Issuer. (For purposes of this clause (xii), any such event shall be considered to have occurred when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Issuer in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Issuer.);

(xiii) the consummation of a merger, consolidation or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and

(xiv) appointment of a successor or additional trustee or the change in the name of a trustee, if material.

For purposes of this Agreement, “actual knowledge” of the occurrence of a Listed Event shall mean knowledge by an officer at the principal office of the Bond Trustee with regular responsibility for the administration of matters related to the Indenture.

(b) The Bond Trustee shall, within three (3) Business Days of obtaining actual knowledge of the occurrence of any of the Listed Events described in subsection (a)(i), (iii), (iv), (v), (vi), (viii, but only with respect to tender offers), (ix), (xi) and (xii) contact the Disclosure Representative and the Dissemination Agent and inform

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them of the occurrence of such Listed Event. The Dissemination Agent shall then file a notice of such occurrence with the Municipal Securities Rulemaking Board and EMMA within three (3) Business Days of its being informed thereof and in any event no more than ten (10) Business Days after the occurrence of such event with a copy to the Issuer.

(c) The Bond Trustee shall, within three (3) Business Days of obtaining actual knowledge of the occurrence of any of the Listed Events described in subsection (a)(ii), (vii), (viii, but only with respect to bond calls), (x), (xiii) and (xiv), without any determination as to materiality, contact the Disclosure Representative, inform such person of such Listed Event, and request that the Issuer promptly notify the Dissemination Agent in writing whether or not to report the event pursuant to subsection (g) below.

(d) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event enumerated in subsection (c) above because of a notice from the Bond Trustee pursuant to subsection (c) above or otherwise, the Issuer shall determine in a timely manner so as to comply with subsection (a) above if such event would be material under applicable federal securities laws; provided that any event described in subsection (a)(vi) above shall always be material and shall be reported as provided in (b) above.

(e) If the Issuer has determined that knowledge of the occurrence of a Listed Event enumerated in subsection (c) above would be material under applicable federal securities laws, the Issuer shall promptly notify the Dissemination Agent in writing of the occurrence of each such Listed Event. Such notice shall instruct the Dissemination Agent to report the occurrence pursuant to subsection (g) below.

(f) If in response to a request under subsection (c) above, the Issuer determines that the occurrence of the Listed Event enumerated in subsection (c) above would not be material under applicable federal securities laws, the Issuer shall so notify the Dissemination Agent in writing and instruct the Dissemination Agent not to report the occurrence pursuant to subsection (g) below. If the Issuer fails to respond to a request under subsection (c) above, the Bond Trustee and the Dissemination Agent shall be under no obligation to take any further action.

(g) If the Dissemination Agent has been instructed by the Issuer to report the occurrence of a Listed Event enumerated in subsection (c) above, the Dissemination Agent shall file a notice of such occurrence with the Municipal Securities Rulemaking Board and EMMA within three (3) Business Days of its receipt of such instructions from the Issuer and in any event no more than ten (10) Business Days after the occurrence of such event with a copy to the Issuer.

(h) Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(iv) and (v) need not be given under this subsection any earlier than the date on which the notice (if any) of the underlying event is given to the holders of affected Bonds pursuant to the Indenture.

(i) The Issuer shall also provide, or shall cause the Dissemination Agent to provide, to EMMA, no later than fifteen (15) days after the receipt thereof, any reports from a Management Consultant received in connection with the Revenue Covenant contained in the Indenture.

Section 6. Termination of Reporting Obligation. Except as otherwise provided herein, the obligations under this Agreement shall terminate upon the legal defeasance, prior redemption, or payment in full of all of the Bonds. If the Issuer’s obligations under the Indenture are assumed in full by another person or entity, such other person or entity shall be responsible for compliance with this Agreement in the same manner as if it were the Issuer and the Issuer shall have no further responsibility hereunder (except with respect to obligations of the Issuer that survive the termination hereof pursuant to Section 11 hereof). If such assumption occurs prior to the final maturity of the Bonds, the Issuer shall give, or cause to be given, notice of such assumption in the same manner as for a Listed Event under Section 5(g) hereof.

Section 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the Issuer pursuant to this Agreement.

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If at any time there is not any other designated Dissemination Agent, the Bond Trustee shall be the Dissemination Agent. The Dissemination Agent may resign at any time by providing at least thirty (30) days’ written notice to the Issuer and the Bond Trustee.

Section 8. Amendment; Waiver. (a) Notwithstanding any other provision of this Agreement, the Issuer, the Dissemination Agent, and the Bond Trustee may amend this Agreement (and the Dissemination Agent and the Bond Trustee shall agree to any amendment so requested by the Issuer other than amendments increasing or affecting the obligations or duties of the Dissemination Agent or the Bond Trustee, which amendments shall require the consent of the Dissemination Agent or the Bond Trustee, as applicable) and any provision of this Agreement may be waived if such amendment or waiver would not, in the opinion of nationally recognized federal securities law counsel, cause the undertakings herein to violate the Rule as in effect at the time of the original issuance of the Bonds, after taking into account any amendments or interpretations of the Rule.

(b) In the event of any amendment or waiver of a provision of this Agreement, the Issuer shall describe such amendment in the next Annual Report of the Issuer, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or, in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the Issuer. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, (i) notice of such change shall be given in the same manner as for a Listed Event under Section 5(g), and (ii) the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.

Section 9. Additional Information. Nothing in this Agreement shall be deemed to prevent the Issuer from disseminating any other information, using the means of dissemination set forth in this Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Agreement. If the Issuer chooses to include any information in any Annual Report or notice of occurrence of a Listed Event, in addition to that which is specifically required by this Agreement, the Issuer shall not have any obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

Section 10. Default. In the event of a failure of the Issuer to comply with any provision of this Agreement, the Bond Trustee may, or shall, at the written direction of either of the Participating Underwriter or any holder or Beneficial Owner of Bonds (but only if and to the extent the Bond Trustee is indemnified to its satisfaction from any costs, liability, or expense including, without limitation, fees and expenses of its attorneys, as provided in the Indenture), take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the Issuer to comply with its obligations under this Agreement. A default under this Agreement shall not be deemed an Event of Default under the Indenture, and the sole remedy under this Agreement in the event of a failure of the Issuer to comply with this Agreement shall be an action to compel performance; provided, however, that nothing in this Agreement shall limit any holder’s rights under applicable federal securities laws.

Section 11. Duties, Immunities, and Liabilities of Trustee and Dissemination Agent. Article VIII of the Indenture is hereby made applicable to this Agreement as if this Agreement were (solely for this purpose) contained in the Indenture. The Dissemination Agent and the Bond Trustee shall have only such duties as are specifically set forth in this Agreement, and, subject to the last sentence of this paragraph, the Issuer agrees to indemnify and save the Dissemination Agent and the Bond Trustee, and their respective officers, directors, employees, and agents, harmless against any loss, expense, and liabilities that they may incur arising out of or in the exercise or performance of their respective powers and duties hereunder, including the costs and expenses (including attorney’s fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s or the Bond Trustee’s negligence or willful misconduct. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent or the Bond Trustee and payment of the Bonds or the termination hereof. The liability of the Issuer hereunder is limited to available moneys in the Trust Estate (as defined in the Indenture).

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Section 12. Notices. (a) Any notices or communications to or among any of the parties to this Agreement may be given as follows:

To the Issuer: Maryland Economic Development Corporation 300 East Lombard Street, Suite 1000 Baltimore, Maryland 21202 Attention: Executive Director

with a copy to: Teri M. Guarnaccia, Esquire Ballard Spahr LLP 300 East Lombard Street, Suite 1800 Baltimore, Maryland 21202

To the Bond Trustee: Manufacturers and Traders Trust Company 25 South Charles Street, 11th Floor Baltimore, Maryland 21201 Attention: Corporate Trust Department

To the Dissemination Agent: Manufacturers and Traders Trust Company 25 South Charles Street, 11th Floor Baltimore, Maryland 21201 Attention: Corporate Trust Department

(b) Any person may, by written notice to the other persons listed above, designate a different address or may designate telephone number(s) or facsimile number(s) to which subsequent notices or communications should be sent.

Section 13. Beneficiaries. This Agreement shall inure solely to the benefit of the Issuer, the Bond Trustee, the Dissemination Agent, the Participating Underwriter, and their successors and assigns, and the holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

Section 14. Counterparts. This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

Section 15. Applicable Law. This Agreement shall be construed under the laws of the State and, to the extent inconsistent, with the laws of the United States of America.

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IN WITNESS WHEREOF, the Issuer, the Dissemination Agent, and the Bond Trustee have executed this Agreement under seal on the date and year first written above. WITNESS: MARYLAND ECONOMIC DEVELOPMENT CORPORATION By (SEAL)

Robert C. Brennan, Executive Director

MANUFACTURERS AND TRADERS TRUST COMPANY, as Dissemination Agent

By (SEAL)

Name: Title

MANUFACTURERS AND TRADERS TRUST COMPANY, as Bond Trustee

By (SEAL)

Name: Title:

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EXHIBIT A

FORM OF NOTICE OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: Maryland Economic Development Corporation Name of Bond Issue: $12,705,000 Maryland Economic Development Corporation Student Housing Refunding

Revenue Bonds (Salisbury University Project) Series 2013 (the “Bonds”) Date of Issuance: June 3, 2013 NOTICE IS HEREBY GIVEN that the Issuer has not provided an Annual Report (as defined in the Continuing Disclosure Agreement dated as of June 1, 2013, relating to the Bonds) for the fiscal year ending ________________ with respect to the Bonds. Dated:_______________

MANUFACTURERS AND TRADERS TRUST COMPANY, on behalf of Maryland Economic Development Corporation

By

Name: Title:

cc: Maryland Economic Development Corporation